# How to Calculate Average Outstanding Balance

In the world of personal banking, your balance is the amount of money you currently have in your account. If you have multiple accounts, the balance is the sum of all account balances. Another measure used to measure the amount of unpaid, interest-bearing loan balance, such as credit cards, is referred to as the outstanding balance. The average outstanding balance is a measure often used by creditors to determine how much of a loan portfolio is outstanding. The average is taken by looking at the beginning value and end of a specific time period.

## Step 1

Identify your time frame. Sometimes the outstanding balance is calculated on a daily basis. Other times it is calculated on a monthly, quarterly or annual balance. For this example, assume the time frame is one month, from January to February.

## Step 2

Gather your information. You will need to obtain the average loan amount outstanding in the loan portfolio for the beginning of the time period and the end of the time period as well as the number of accounts held in the loan portfolio. Specifically, you will need the ending balance of your account for two different periods. For instance, assume the ending balance for January is \$100,000 and the ending balance for February is \$110,000.

## Step 3

Find the average of the ending balance from January and the ending outstanding balance for February. The calculation is the end of the first month plus the end of the most recent month divided by two. The calculation for this example is \$100,000 plus \$110,000 divided by two, or \$105,000.

## Step 4

Divide the answer by the average number of account within the loan portfolio. Assume the number of accounts at both the end and beginning of the period is 10. \$105,000 divided by 10 is \$10,500.

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