diff --git a/fineract-provider/src/main/java/org/apache/fineract/portfolio/loanaccount/loanschedule/domain/AbstractCumulativeLoanScheduleGenerator.java b/fineract-provider/src/main/java/org/apache/fineract/portfolio/loanaccount/loanschedule/domain/AbstractCumulativeLoanScheduleGenerator.java
index 12bc62e798c..f73d494e7c6 100644
--- a/fineract-provider/src/main/java/org/apache/fineract/portfolio/loanaccount/loanschedule/domain/AbstractCumulativeLoanScheduleGenerator.java
+++ b/fineract-provider/src/main/java/org/apache/fineract/portfolio/loanaccount/loanschedule/domain/AbstractCumulativeLoanScheduleGenerator.java
@@ -3114,6 +3114,11 @@ private LoanScheduleDTO rescheduleNextInstallmentsForProgressiveLoans(final Math
                 processInstallmentsInstallments = fetchRetainedInstallmentsForProgressiveLoans(loan.getRepaymentScheduleInstallments(),
                         rescheduleFrom, currency);
             }
+            // if processed installements is empty , check for graced installments
+            if (processInstallmentsInstallments.isEmpty()) {
+                processInstallmentsInstallments = loan.getRepaymentScheduleInstallments().stream()
+                        .filter(LoanRepaymentScheduleInstallment::isFullyGraced).toList();
+            }
             final List<LoanRepaymentScheduleInstallment> newRepaymentScheduleInstallments = new ArrayList<>();
 
             // Block process the installment and creates the period if it falls