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The original amount borrowed or invested, not including interest or earnings. In loan amortization, principal is the portion of each payment that reduces the balance owed.
On a $250,000 mortgage, the principal is $250,000. After 5 years of payments, you might have paid down $20,000 in principal, leaving a balance of $230,000.
Paying extra toward principal reduces your loan balance faster and decreases total interest paid over the loan's life.