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:
“... [a] girl one day flared out and told the principal “the only mission opening before a girl in his school was to marry one of those candidates [for the ministry].” He said he didn’t know but it was. And when at last that same girl announced her desire and intention to go to college it was received with about the same incredulity and dismay as if a brass button on one of those candidate’s coats had propounded a new method for squaring the circle or trisecting the arc.”
—Anna Julia Cooper (1859–1964)
“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)