Arrears

AAA

DEFINITION of 'Arrears'

Overdue debt, liability or obligation. An account is said to be "in arrears" if one or more payments have been missed in transactions where regular payments are contractually required, such as mortgage or rent payments and utility or telephone bills.

INVESTOPEDIA EXPLAINS 'Arrears'

The term "in arrears" does not necessarily have a negative connotation in certain contexts such as fixed-income instruments, where it may indicate that interest payments are simply made at the end of a period. For example, mortgage interest in the U.S. is paid in arrears, which means that in the case of monthly payments, each payment covers principal repayment and mortgage interest for the month preceding the payment due date.

RELATED TERMS
  1. Default

    1. The failure to promptly pay interest or principal when due. ...
  2. Mortgage Interest

    The interest charged on a loan used to purchase a residence. ...
  3. Periodic Interest Rate

    The interest rate charged on a loan or realized on an investment ...
  4. Arrearage

    An amount on a loan, cumulative preferred stock or any credit ...
  5. Arrears Swap

    An interest rate swap in which the floating payment is based ...
  6. TSA Pre

    This program allows travelers deemed low-risk by the Transportation ...
Related Articles
  1. Budgeting

    How Much Debt Can You Handle?

    Follow these five steps to manage debt without cutting up your credit cards.
  2. Budgeting

    Debt Consolidation Made Easy

    These five steps can help get you out of debt faster and easier than you'd ever imagined.
  3. Credit & Loans

    A Lifeline For Those Drowning In Debt

    Don't wait to be saved, find out where the lifesaving devices are and hang on tight!
  4. Home & Auto

    The Benefits Of Mortgage Repayment

    Buying a home may be the biggest debt you'll ever incur. Learn why you should retire it sooner, rather than later.
  5. Retirement

    What You Need To Know About Bankruptcy

    Don't choose this last-resort option until you learn how it will affect your future.
  6. Investing

    What Are The Latest News On The Beer Industry?

    Beer isn’t a traditional commodity, as there are no futures markets associated with it, but it is considered an alternative investment.
  7. Investing

    Reassessing Your Approach To Bond Investing

    Rethinking your fixed-income portfolio may not resonate in quite the same way as dropping 10 pounds or finally giving up that smoking habit.
  8. Markets

    What Is The Current Market Supply For Oil?

    Oil prices skidded by more than 10 %, sparking a sell-off in U.S. equities of 3.5 %, a Treasury rally and global headlines of growth fears and tumult.
  9. Active Trading Fundamentals

    Minute-to-Minute Trade Signals for Today's Scalper

    Scalpers profit in the modern electronic environment by utilizing technical indicators that are custom-tuned to very small time frames.
  10. Credit & Loans

    Credit Card Review: The Amazon.com Rewards Visa

    The rewards from

You May Also Like

Hot Definitions
  1. Weight Of Ice, Snow Or Sleet Insurance

    Financial protection against damage caused to property by winter weather specifically, damage caused if a roof caves in because ...
  2. Weather Insurance

    A type of protection against a financial loss that may be incurred because of rain, snow, storms, wind, fog, undesirable ...
  3. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
  4. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  5. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
  6. Fixed Asset

    A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be ...
Trading Center