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:
“It is perhaps the principal admirableness of the Gothic schools of architecture, that they receive the results of the labour of inferior minds; and out of fragments full of imperfection ... raise up a stately and unaccusable whole.”
—John Ruskin (1819–1900)
“Action is at bottom a swinging and flailing of the arms to regain one’s balance and keep afloat.”
—Eric Hoffer (1902–1983)