A bank using this module can define a grace period for the products it offers. This specification applies to all contracts involving the product. A penalty interest is applied in case of default in payment, on expiry of the grace period. Penalty is not be applied if the payment is made during the grace period. In case the payment is not made, the penalty is calculated from the day the payment is outstanding.

When Payment Delay Days is given, then Grace Period starts from Pay By Date. If payment is made after Grace Period, then the penalty starts from Pay By Date.