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:
“Rather than have it the principal thing in my son’s mind, I would gladly have him think that the sun went round the earth, and that the stars were so many spangles set in the bright blue firmament.”
—Thomas Arnold (1795–1842)
“True balance requires assigning realistic performance expectations to each of our roles. True balance requires us to acknowledge that our performance in some areas is more important than in others. True balance demands that we determine what accomplishments give us honest satisfaction as well as what failures cause us intolerable grief.”
—Melinda M. Marshall (20th century)