A grace period is a specific length of time after a payment due date during which a borrower can pay without facing any late fees or penalties. It is a common feature of credit card accounts, loans, and other financial agreements. For instance, if a bill is due on the first of the month and there’s a 15-day grace period, the borrower has until the 15th to pay without extra charges. Grace periods offer borrowers more flexibility to meet their financial obligations and avoid extra charges.