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:
“For me, the principal fact of life is the free mind. For good and evil, man is a free creative spirit. This produces the very queer world we live in, a world in continuous creation and therefore continuous change and insecurity. A perpetually new and lively world, but a dangerous one, full of tragedy and injustice. A world in everlasting conflict between the new idea and the old allegiances, new arts and new inventions against the old establishment.”
—Joyce Cary (1888–1957)
““... To say of one mask it is like,
To say of another it is like,
To know that the balance does not quite rest,
That the mask is strange, however like.””
—Wallace Stevens (1879–1955)