Principal balance, in regard to a mortgage or other debt instrument, is the amount due and owing to satisfy the payoff of the underlying obligation.
Amortized mortgage loans automatically pay a portion of each monthly payment to the principal balance with the rest being paid as interest.
An interest-only loan does not require any monies be paid toward the principal balance each month, but is allowable.
Famous quotes containing the words principal and/or balance:
“All animals, except man, know that the principal business of life is to enjoy it.”
—Samuel Butler (1835–1902)
“At last I feel the equal of my parents. Knowing you are going to have a child is like extending yourself in the world, setting up a tent and saying “Here I am, I am important.” Now that I’m going to have a child it’s like the balance is even. My hand is as rich as theirs, maybe for the first time. I am no longer just a child.”
—Anonymous Father. Ourselves and Our Children, by Boston Women’s Health Book Collective, ch. 5 (1978)