# What is a remaining balance?

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

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

To calculate the remaining balance, you need to collect a variety of data. This would include the original balance or. The total amount of credit as well as the amount and frequency of payments on the account. This calculation also requires information on the interest rate and term of the loan. Many financial institutions offer online calculators to help consumers determine the remaining balance, while some list the balance on monthly statements. This balance can also be listed as the disbursement amount or outstanding balance.

For a non-interest-bearing checking account, the remaining balance is the total amount left in the account after all checks and debits have cleared. Without interest, this figure is relatively easy to calculate. For an interest-bearing loan, the calculation may be more difficult. For example, consider a \$10,000 (USD) car loan at five percent annual interest rate. After making a total of \$8,000 in payments, the buyer would have a balance of much more than \$2,000 to account for both the principal balance and the interest.

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