Principal
The amount borrowed or remaining unpaid. The part of the monthly payment
that reduces the remaining balance of a mortgage.
The original loan amount borrowed. Origination and guarantee fees may be deducted from this amount
before disbursement. Interest is computed as a percentage of the principal. The borrower pays interest
on the outstanding (or remaining) principal each month until the entire loan is paid off.
The basic element of the loan as distinguished from interest and mortgage insurance premium. In other
words, principal is the amount upon which interest is paid.
