loans
principal
The original sum of money borrowed in a loan, or the amount invested before interest is added.
Example
"After two years of payments, she had reduced the principal on her mortgage by $8,000."
💡 Memory Tip
PRINCIPAL is the PRINCIPAL (main) amount — the original sum, not the interest.
Etymology
From Latin 'principalis' meaning 'first, chief' — the chief (original) amount.
Common Misspellings
principleprinicpalprincipelpricipal
Related Terms
See Also
interest