0
The money you owe.
You pay the principal, plus interest (rent for using someone else's money) to repay the loan.
The principal is normally the amount borrowed, which is reduced by paying any amount exceeding the interest.
The principal is the original amount that you borrow. It is usually set for an equal payment amount which includes the interest charge for the period. The principal decreases each time you make a payment as the interest amount due is based on the loan balance at the interest rate of the note.
Easy example would be:
You borrow $1000 @ 10% interest monthly. Monthly payment is $150.
Month 1 - Interest is $100 so $50 would be deducted from principal, new balance is $950.
Month 2 - Interest is $95 so $55 would be deducted from principal, new balance is $855.
Month 3 - Interest is $85.50 so $64.50 would be deducted from principal, new balance is $790.50.
Month 4 - Interest is $79.05 so $70.95 would be deducted from principal, new balance is $719.55.
Month 5 - Interest is $71.15 so $71.96 would be deducted from principal, new balance is $647.59.
A much easier way is to print an amortization schedule.
Wiki User
∙ 10y ago
Add your answer:
Earn +20 pts
What is principal amortization?
It is the amortization of the principal of the loan.
Is the base amount of a loan the principle or the principal?
The principal.
What is the principal on a loan?
It is the base amount of the loan, but not including interest.
What is the definition of an amortized loan?
An amortized loan is just a basic loan where the principal and interest are paid on a monthly basis. Usually, the majority of the interest is paid first, then the principal.
What is the outstanding balance on a loan called?
The amount of the loan is called the principal.
What is principal amortization?
It is the amortization of the principal of the loan.
Is the base amount of a loan the principle or the principal?
The principal.
What are principal and interest on a loan?
The principal is the initial amount borrowed in a loan. Interest is the cost charged by the lender for borrowing that principal amount. The total repayment amount on a loan typically includes both the principal and the interest.
What is the principal on a loan?
It is the base amount of the loan, but not including interest.
What is the definition of an amortized loan?
An amortized loan is just a basic loan where the principal and interest are paid on a monthly basis. Usually, the majority of the interest is paid first, then the principal.
When the bank gives adjustment on principal on a loan what account do you debit?
the loan
What is the outstanding balance on a loan called?
The amount of the loan is called the principal.
What is the meaning of principle on a loan?
The base amount of the loan - not including interest That is the principal of the loan not the principle
What is the unpaid portion of a loan called?
Principal
What exactly is an amortization loan?
In banking and finance, an amortizing loan is a loan where the principal of the loan is paid down over the life of the loan (that is, amortized) according to some A loan with scheduled periodic payments of both principal and interest. This is opposed to loans with interest-only payment features, balloon payment features.
What is a curtailment of a loan?
cumulative principal payment(s)
Can a loan company apply a fee for payment to the principal of a loan?
no they cant. they must go by the original contract
