Maturity

Financial Dictionary -> Loans -> Maturity

In business and finance Maturity simply refers to the agreed date that the full amount on a loan or bond must be paid back to the lender. In other words when, if everything goes forward by the terms of the loan, this is the date that the final repayment is made. We call this full amount the principal amount and when it reaches the final date we say the loan has matured.

Maturity does not always refer to a loan or bond though and can be applied to any other type of debt. The maturity of a credit card statement is the date at the end of the month when the minimum payment is due. Any type of debt, when it is due can be called the maturity date.

The initial maturity date of a loan or other debt can change a number of times during the lifetime of the debt. This may be due to the addition of more interest, if the borrower defaults or has trouble paying off the debt, or if the borrower makes a big lump sum payment before the final payment date. There may also be times when the borrower refinances a loan several times.