Grace period is the deferred repayment period of debt. When the loan is used for a project, the repayment source is based on the income obtained after the project is put into production. In this case, there is no repayment source during the project construction period, even at the initial stage of production, and it is necessary to agree on a deferred repayment time. In the project of utilizing foreign capital, the borrowed foreign exchange needs to be repaid through the export of products, so it still takes a long time for the products to earn foreign exchange after the project is put into production, which is very important in determining the length of grace period. Although the debt may not repay the principal first during the grace period, according to international practice, the interest (withdrawal) under the loan project is paid to the lender once every six months after borrowing, which means that the grace period is only applicable to the repayment of deferred principal. Pay interest every six months during the grace period and ask the borrower to find another source of foreign exchange funds. One way is to make the interest principal, and add the interest paid every six months to the total loan, that is, increase the total loan. This method must be approved by the relevant competent department in advance.

Extended data

After the mortgage is issued within the grace period, the borrower only needs to pay interest every month within the period stipulated in the contract, and will not return the loan principal for the time being. After the grace period, the loan principal and interest shall be repaid in the form of average capital or equal principal and interest as agreed in the contract. The grace period is 1 year (12 periods), 2 years (24 periods) and 3 years (36 periods).

For example, the buyer applies for a loan of 500,000 yuan 1 year. If the grace period is1year, the loan period is 1 1 year (1year+1 year), and the loan issuance date is 2006/kloc. During this period, the borrower only pays interest and does not repay the principal. After the expiration of one year 12, the borrower began to repay the principal and interest, and the monthly repayment amount increased greatly. This repayment method can greatly reduce the early repayment pressure, especially suitable for buyers who have exhausted their savings when buying a house, but have insufficient economic strength such as decoration and wedding, and have better income prospects in the later period.