How to Figure Out the Maturity Date of a Loan
When you take out a loan, it can feel like you will never pay it off. You keep writing check after check, with no apparent end in sight. But there is an end. Every loan has a maturity date on which you will make your final loan payment. Your car loan, your student loan or your home loan. All of these loans have a day on which you will make one last payment. Figuring out the maturity date of a loan sounds complicated, but it doesn’t have to be.
When you take out a loan, you are essentially making a promise to repay a certain amount of money to the lender at a future date. That future date is known as the maturity date. Lenders like to have a maturity date so they know when their money will be repaid.
The maturity date of a loan is the date on which all remaining principal and interest are paid. It is the final payment date for any loan you take out. Once you make the final payment to your lender, your outstanding debt is repaid, you owe no future interest and you own the property free and clear.
Loan maturity dates vary depending on the type of loan. A fixed loan matures on a specific date. In the case of a 30-year fixed loan, the maturity date would be a specified date 30 years from the date you took out the loan.
For example, you take out a 30-year mortgage loan for $400,000 with a maturity date of June 1, 2048. Over the course of the loan, you will make your monthly premium and interest payment. On June 1, 2048, you will repay your mortgage lender any remaining interest payments as well as any remaining principal. With a 30-year mortgage, you are likely to have paid off what is owed enough to only have to make one final payment on June 1, 2048.
Most loans have a much shorter time until their maturity date. A car loan may have a maturity date five years out. A student loan may mature in 10 years. Whatever the date, the concept above is the same and you will make regular payments until the maturity date.
When you take out a loan, you should be given a worksheet that lists your monthly premium and interest payments for the life of the loan. This way you can see when your maturity date is and how much you will owe for your final payment. The final payment can be less than, equal to or more than what your monthly payment is, depending on how much remains on your loan.
If you would like to figure out the maturity date of a loan, you can also use an online maturity date calculator. By entering your loan amount, interest rate and the length of the loan, you can get a breakdown of the monthly premium and interest payments along with your loan maturity date.
When in doubt about your loan’s maturity date, check with your lender. Your lender will be able to give you a repayment table based on where you are in your repayment and the maturity date of your loan.