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:
“The principal rule of art is to please and to move. All the other rules were created to achieve this first one.”
—Jean Racine (1639–1699)
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—Melinda M. Marshall (20th century)