What is a remaining balance? (with pictures)

A remaining balance is how much is left to pay a bill in full.

Remaining balance is a financial term used to describe how much money is needed to settle an account. The remaining balance can be positive or negative, depending on the account type, and is equal to the amount of money needed to clear the balance. If the balance is on a credit account, such as a car loan, this is a liability for the car buyer and will be a negative amount. If the balance is in a bank account or similar instrument, it represents an asset and will be a positive number. By paying the full amount of the loan or withdrawing the contents of a bank account, the holder could clear the remaining balance and liquidate the account.

By paying the full amount of the loan or withdrawing the contents of a bank account, the holder could clear the remaining balance and liquidate the account.

This financial concept can be used by anyone from bankers to individuals. Homeowners and mortgage lenders use remaining balance to describe the outstanding amount of a mortgage loan. Credit card companies may use remaining balance to describe a consumer’s total charges or the amount of available credit remaining on an account. Banks and other financial institutions also rely on this concept when conducting everyday business transactions or helping consumers understand their bills.

To calculate the remaining balance, it is necessary to gather a variety of data. This includes the original balance or total amount borrowed, as well as the amount and frequency of account payments. This calculation also requires information about the interest rate and duration of the loan. Many financial institutions provide online calculators to help consumers figure out their remaining balance, while some list the balance on monthly statements. This balance may also be listed as a refund amount or pending balance.

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In an interest-free checking account, the remaining balance equals the total amount of money left in the account after all checks and debits have cleared. Without interest to dispute, this number is relatively easy to calculate. On an interest-bearing loan, the calculation can be more difficult. For example, consider a $10,000 US Dollars (USD) car loan at 5% annual interest. After paying a total of $8,000 USD in payments, the buyer would have a remaining balance well in excess of $2,000 USD to account for the remaining principal and interest.

This information can be very useful for consumers and serves as a useful tool in financial planning. People who want to pay off debt or analyze their credit should check the balance of all credit and debit accounts. This balance can also be used to allow consumers to calculate how much interest they are paying and can spur them to pay off loans faster or look for better deals. Knowing the remaining balance on an account can also help a loan holder figure out when a car or house will finally be paid off.

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