What Does It Mean When a Bond Matures?

A bond's term to maturity is the period during which its owner will receive interest payments on the investment. When the bond reaches maturity, the owner is repaid its par, or face, value. The term to maturity can change if the bond has a put or call option.

What does the maturity date on a bond mean?

The maturity date is the date on which the principal amount of a note, draft, acceptance bond or other debt instrument becomes due. ... The maturity date also refers to the termination date (due date) on which an installment loan must be paid back in full.

What happens when a loan reaches maturity?

Loan maturity date refers to the date on which a borrower's final loan payment is due. Once that payment is made and all repayment terms have been met, the promissory note that is a record of the original debt is retired. In the case of a secured loan, the lender no longer has a claim to any of the borrower's assets.