Average Outstanding Balance

Definition of 'Average Outstanding Balance'


The unpaid, interest-bearing balance of a loan or loan portfolio averaged over a period of time, usually one month. The average outstanding balance refers to any term, instalment, revolving or credit card debt on which interest is charged.

Investopedia explains 'Average Outstanding Balance'


The average outstanding balance on credit cards and loans is a critical factor in a consumer's credit rating. Average outstanding balances on credit cards are reported to credit agencies monthly on active accounts, along with any amounts that are past due.


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