Outstanding balance


The term outstanding balance refers to the total amount left that you have to pay on a finance agreement. This needs to be paid to complete the finance package.


Does the outstanding balance include all the charges?

The amount on the outstanding balance will vary depending on the type of car finance product you have taken out. If you have taken out a package with a fixed interest rate, such as a hire purchase agreement, then the total cost of the agreement is known at the start of the agreement, and so the outstanding balance will include the total amount owed. If you have an agreement with a variable rate of interest, then the outstanding balance might just show the outstanding balance on the amount owed, and not the interest accumulated across the agreement.


How can I find out my outstanding balance?

As part of your car finance package, you may receive a monthly breakdown of how much is owed on the agreement. This could be a balance statement received by mail or email, or something in an online account where you can log in to view. The frequency of this balance will be set at the start of the agreement, so if you want to view the outstanding balance more often, then this should be adjusted at the start of the package.

You can also contact the customer advisor of the finance provider and they will be able to give you an update on how much is left to pay on the finance package, i.e the outstanding balance.


Can I pay off the outstanding balance early?

If you come into some money or your financial circumstances change, it may be possible to pay off the finance package early. The exact terms of doing this will have been included in the terms and conditions of the finance package at the start of the agreement, so read through those documents first. Then you should contact the finance provider and speak to them about your intention to finish the finance agreement early.

Be aware, the finance provider will make most of their money from the interest charged on the finance package. So if you had an agreement with a variable rate of interest, there may be an additional fee that you have to pay to end the agreement. You should also remember that paying off a finance package normally can help improve your credit rating, as it shows you can handle debt responsibly. So you may want to consider just continuing the package normally, especially if you are in the process of repairing your credit.


What if I can’t afford the outstanding balance?

If you are having difficulty paying your finance package, you should speak to the finance provider first. Any Financial Conduct Authority approved provider is obliged to help you make your repayments and not put you into unnecessary financial difficulty. You can also contact debt advice charities for impartial advice on how to cope with any financial difficulties you are having. Being honest with yourself and the finance provider is the best first step you can take.

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