what is an outstanding balance?

1 day ago 1
Nature

An outstanding balance is the total amount of money that is still unpaid and owed by an individual or business. This can include the remaining principal, interest, fees, and any other charges on debts such as credit cards, loans, or invoices. It represents the sum left to be paid after any partial payments have been made and can accrue additional interest or penalties if not settled promptly.

Details on Outstanding Balance

  • In personal finance, for example, if a credit card holder owes ₹20,000 and pays ₹5,000, the ₹15,000 left is the outstanding balance, which may accumulate interest over time.
  • For businesses, an outstanding balance often refers to invoices that have been partially paid or remain unpaid, affecting cash flow and financial health.
  • The outstanding balance differs from the current balance and the statement balance. The outstanding balance includes all unpaid amounts at a given time, including accrued interest and fees.

In summary:

  • It is the unpaid portion of a debt, including principal and associated costs.
  • Can apply to credit cards, loans, invoices, or utility bills.
  • Managing it well is critical to avoid additional charges and maintain financial stability.