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)
“Turning, I kissed her,
Easily for sheer joy tipping the balance of love.”
—Philip Larkin (1922–1986)