Principal
The original amount borrowed or the capital balance outstanding, excluding interest and most charges.
Related terms
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Capital repayment
A payment that reduces the amount originally borrowed, as distinct from a payment that only covers interest or charges.
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Interest
The cost of borrowing money, usually calculated as a percentage of the amount outstanding over time.
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Loan
Money advanced by a lender that must be repaid under agreed terms, usually with interest or fees.
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