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Loan Types & Features

Principal

What you originally borrowed — and still owe. Reduced with each P&I payment.

What is Principal?

Principal is the amount of money you originally borrowed — or the outstanding balance you still owe. Each P&I repayment reduces principal; interest-only repayments don't. Your loan balance = principal outstanding at any point in time.

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Related terms

Each payment covers both interest and a slice of principal.

Loan Types & Features

The cost of borrowing. Not the only thing to compare.

Loan Types & Features

How your loan pays down — and why early repayments matter far more.

Loan Types & Features
Last updated: April 2026