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 point of cleverness is to know how to value things just as they deserve.”
—François, Duc De La Rochefoucauld (1613–1680)
“Mental health depends upon the maintenance of a balance within the personality between the basic human urges and egocentric wishes on the one hand and the demands of conscience and society on the other hand.”
—Selma H. Fraiberg (20th century)