Definition of Outstanding Loans

Definition of Outstanding Loans
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An outstanding loan is the portion of a loan that has yet to be repaid. Creditors sometimes use the term "outstanding balance" to describe the part of a loan that still needs to be repaid.

Interest vs. Principal

Loan statements often differentiate between interest and principal when referring to the outstanding portion of a loan. The outstanding principal balance is the original amount of the loan that still needs to be repaid. The outstanding interest balance refers to the amount of interest that has yet to be paid. The term outstanding loan can refer to the outstanding principal, unpaid interest or the total value of both.

Repercussions for Missing Payments

It's important to pay outstanding loans on time. Otherwise, creditors may take steps against you. For example, consumers who fail to pay their outstanding car loan debts may have their cars repossessed. Students who fail to pay their outstanding student loan debts may be refused future financial aid, or a school may refuse to release their official academic transcripts.