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An auto loan grace period is a window of time past the payment due date when you can still make a payment without incurring late fees or other penalties. Car loan grace periods vary by lender and generally range from 10-15 days.
For example, if your auto loan payment is due on the 15th of the month, and your lender has a 10-day grace period, you would not be charged a late fee if you pay by the 26th of the month.
Most but not all auto lenders offer a grace period. You can check your loan agreement or talk to your lender to see if you have a grace period and how long it is.
Is a car payment considered late during the grace period?
Lenders with a grace period consider a payment to be on time if it’s made within the designated time frame. During the grace period, your missed payment will not be reported to the three major credit bureaus as late, and you will not pay a late fee.
Once you’re past the grace period — for example, you haven’t made any payment on day 11 of a 10-day grace period — you will most likely incur a late fee. But your late payment still isn’t usually reported to the credit bureaus yet.
Typically, when an auto loan payment is 30-days late, or soon after, lenders consider the loan to be delinquent and report it to the credit bureaus.
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What if I can’t make a car payment during the grace period?
If you know you can’t make your car payment before your grace period ends, contact your lender as soon as possible. It’s especially important to talk to them before your payment is 30 days late and likely to be reported to the credit bureaus.
Some lenders have auto loan hardship options — such as defering a payment to the end of the loan — which can help you catch up and avoid having an auto loan delinquency on your credit report.
What is the standard auto loan grace period?
Payment grace periods vary from lender to lender. For example, PenFed Credit Union has a grace period of 5 days compared to Digital Federal Credit Union with a grace period of 15 days. Consumers Credit Union offers a grace period of 10 days. Many lenders do not publicly share grace period information.
There are no federal laws pertaining to auto loan grace periods, so for the most part lenders have some leeway in determining if they will offer a grace period and its length. However, some states do have laws concerning how long a grace period should be before a late fee can be charged and how much that late fee can be. For that reason, a lender doing business in multiple states can have different grace periods and late fees.
Late auto loan payments often result from unexpected hardship, so it’s a good idea to know if you have a grace period and how long it is before facing a missed payment. To find out, check your loan agreement or talk to your lender.