The principal is the original amount of money you borrow — the loan amount itself, before interest.
Principal is the outstanding balance of borrowed funds on which interest is calculated, excluding interest and fees.
Interest is charged on the principal, so paying it down faster reduces the interest you owe over time.
If you borrow $200,000 to buy land, the $200,000 is your principal; interest is charged on whatever portion remains unpaid.
Planning a purchase or refinance secured by farmland? AgLoans.com helps farm families prepare a clear, lender-ready package for requests of $500,000 to $25 million secured by agricultural real estate.
Visit AgLoans.com