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:
“The principal difference between love and hate is that love is a irradiation, and hate is a concentration. Love makes everything lovely; hate concentrates itself on the object of its hatred.”
—Sydney J. Harris (b. 1917)
“Daily life is governed by an economic system in which the production and consumption of insults tends to balance out.”
—Raoul Vaneigem (b. 1934)