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:
“I note what you say of the late disturbances in your College. These dissensions are a great affliction on the American schools, and a principal impediment to education in this country.”
—Thomas Jefferson (1743–1826)
“Success goes thus invariably with a certain plus or positive power: an ounce of power must balance an ounce of weight.”
—Ralph Waldo Emerson (1803–1882)