Personal Finance

Q&A: What is a debt balance?

A debt balance, or just a “balance”, is the sum of unpaid debt that is still owed to a specific lender.

Real-life Application: All existing debts have a balance. If someone has a mortgage of $100,000, the balance of that mortgage is $100,000. The balance is simply what is still owed.

Pro Tip: Do your best to pay off credit card balances before interest is charged on them; credit card interest is very high (usually 15-30% annually) compared to other types of debt (current mortgage rates are as low as 3% annually).

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