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:
“We must reserve a back shop all our own, entirely free, in which to establish our real liberty and our principal retreat and solitude.”
—Michel de Montaigne (1533–1592)
“The hero is a mind of such balance that no disturbances can shake his will, but pleasantly, and, as it were, merrily, he advances to his own music, alike in frightful alarms and in the tipsy mirth of universal dissoluteness.”
—Ralph Waldo Emerson (1803–1882)