Principal
The original amount of a loan or investment, before any interest is added.
1 min readReviewed Apr 1, 2026
Quick answer
Principal is the starting amount — the money you borrowed or invested before interest enters the picture.
Where you'll see it
On a mortgage statement, the principal is the part of the payment that actually pays down the balance — as opposed to interest, which just covers the cost of borrowing.
On a savings or investment account, principal is what you contributed, separate from earnings.