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:
“God should not be called an individual substance, since the principal of individuation is matter.”
—Thomas Aquinas (c. 1225–1274)
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—Eric Hoffer (1902–1983)
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