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:
“With a balanced combination of the two principal energies from mother and father, a girl can both be in touch with her womanly strengths and be a powerful force in the world—strong and nurturing, decisive and caring, goal- oriented and aware of the needs of others. She has the courage to voice what she thinks and feels and the strength to follow her destiny.”
—Jeanne Elium (20th century)
“They relieve and recommend each other, and the sanity of society is a balance of a thousand insanities. She punishes abstractionists, and will only forgive an induction which is rare and casual.”
—Ralph Waldo Emerson (1803–1882)