What does the maturity value of a loan represent?

The maturity value of a loan is the total amount that must be repaid by the borrower at the end of the loan term. This includes not only the principal amount borrowed but also the accumulated interest over the life of the loan. Consequently, when a loan reaches its maturity date, the borrower is obligated to repay the full amount, which comprises both the initial principal and any interest charges that have accrued. This concept is foundational in personal financial management, as understanding the maturity value helps individuals recognize the total financial obligation they are committing to when taking out a loan.