Grade 1 is a 0-25% tear of the ligament and you can play with it (mild pain, mild swelling) but grade 2 (25-75%)gets murky, and grade 3 (100% tear) is surgery required.

There's the potential for it to be what is called the "unhappy triad" as well which is a MCL-ACL-lateral(outside)meniscus injury...all occurring due to that same mechanism I described above.