What does "Principle" mean when dealing with loans?

Question

It's hard to find the definition. I have looked it up before posting here, but can't find it.

Thanks in advance.

(I do vote best btw)

Answer 1

The principle is the amount being loan. For example, if I loan you $100 at 10% annual interest, the principle will be the $100. To calculate how much of your payment is going to the loan, subtract the interest from the payment amount. If you do not see the interest charged ask why because I seen some loan companies not disclosing that information on monthly statements.

Answer 2

You're just confusing principle with principal (lots of people make that mistake and I get this joke alot: "Bankers just don't have any principles anymore"). When dealing with loans, you want to look up principal which means the amount owed to the bank, net of any interest or fees. Say you get a car loan: the dollar amount of money you borrowed is the principal.....then interest and fees are added, which make up your payment.

Answer 3

Sorry, your "best answer" is incorrect. I am in a position to know because that is what I do for a living and I have managed big banks for more than two decades at sufficiently senior executive level. The correct term for the original amount borrowed in a loan situation is called principal, not "principle." The latter word is a corrupted form of principal that some have erroneously imbibed and passed on without further scrutiny.

The only time you ever come across "principle" in a loan situation is when a lender communicates a tentative intent to lend to an applicant, subject to the prospective borrower satisfying certain contingencies. In such situations, the lender may advise that your loan has been approved in principle, but you are still far away from actual approval.

Answer 4

It basically means that you may be getting good things now but you are3 making a deal with someone or something that doesn't take the high road and can easily cause you to lose something of value to you. A deal with the Devil, pact with the Devil, or Faustian bargain is a cultural motif widespread wherever the Devil is vividly present, most familiar in the legend of Faust and the figure of Mephistopheles, but elemental to many Christian folktales. In the Aarne-Thompson typological catalogue, it lies in category AT 756B – "The devil's contract." According to traditional Christian belief in witchcraft, the pact is between a person and Satan or any other demon (or demons); the person offers his or her soul in exchange for diabolical favours. Those favours vary by the tale, but tend to include youth, knowledge, wealth, or power. It was also believed that some persons made this type of pact just as a sign of recognizing the Devil as their master, in exchange for nothing. Regardless, the bargain is a dangerous one, for the price of the Fiend's service is the wagerer's soul. The tale may have a moralizing end, with eternal damnation for the foolhardy venturer. Conversely it may have a comic twist, in which a wily peasant outwits the Devil, characteristically on a technical point. Among the credulous, any apparently superhuman achievement might be credited to a pact with the Devil, from the numerous European Devil's Bridges to the superb violin technique of Niccolò Paganini.

Answer 5

What Does Principle Mean

Answer 6

The principle is the amount of the loan. In financial terms a loan is a debt that has two components;the principle being the basic amount owed before interest.

Answer 7

The principle is the original amount you would have borrowed. Out of any term loan your payment consists of some going towards the interest and some going towards the principle.

Answer 8

There is the "priciple" and there is the "intrest".When making payments on a loan you have an intrest rate and the payment goes mostly to the intrest.For example if you have a car loan and you are making $300.00 payments every month,a large chunk of that goes toward the intrest.You can however pay extra a be sure to mark it on your bill that it is to go towards the principle and that extra goes to lowering what you owe on your car.

Answer 9

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RE :What does "Principle" mean when dealing with loans?
It's hard to find the definition. I have looked it up before posting here, but can't find it.

Thanks in advance.

(I do vote best btw)
Follow 18 answers

Answer 10

It is the amount you got the loan for. The principle does not include the money paid for interest charges or late fees.