Original Principal Balance

Definition - What does Original Principal Balance mean?

An original principal balance is the base amount of a loan before any interest is accrued or any refinancing is done. The original principal balance cannot, by law, be above what a person's credit score indicates that they can repay unless there is a co-signor or guarantor.

Justipedia explains Original Principal Balance

The original principal balance represents the exact amount that a borrower agrees to borrow on the day of signing. It is separate from any accrued interest at that stage as none has accrued and thus could be repaid at that rate with a buyout fee instead of interest if the borrower wanted to repay it early.

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