The formula goes like this: B = (PMT/R) x (1 – (1/(1+R)^N) In the formula, “B” is the principal balance, “PMT” is the monthly payment for principal and interest and “N” is the number of months remaining. “R” is your interest rate, but it’s expressed as a monthly rate rather than an annual one.
Thereof, do I need to pay outstanding balance?
Paying the full statement balance is a smart way to escape interest charges. Now, you don’t have to pay the outstanding balance to steer clear of interest and fees. Paying the statement balance will take care of that. But if you pay the entire outstanding balance, you can lower your credit utilization ratio.
Besides, what is an example of outstanding balance?
The outstanding balance and any further interest due will be paid on completion of the land ownership transfer procedures, in the usual way. … For example, imagine that a credit card holder has an outstanding balance of $2500 and that the simple interest rate is 12.99% per annum.
What is outstanding amount in loan?
An average outstanding balance is the unpaid, interest-bearing balance of a loan or loan portfolio averaged over a period of time, usually one month. … Average outstanding balance can be contrasted with average collected balance, which is that part of the loan that has been repaid over the same period.
What’s the difference between outstanding balance and principal balance?
2 Answers. TL;DR – “principal balance” is the loan amount without any added interest/fees and “outstanding balance” is the total amount of the loan including interest/fees (so they can be the same if there’s no interest).