Principal Balance

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)

    “Turning, I kissed her,
    Easily for sheer joy tipping the balance of love.”
    —Philip Larkin (1922–1986)