Also found in: Dictionary, Thesaurus.
The amount of money one borrows. Unless the loan is interest-free, one always pays more than the principal amount to the lender. The interest is calculated over the principal amount still outstanding. As a result, many loans are amortized so that a greater amount of principal amount remains outstanding for a longer period of time so the lender can make the most profit from the loan. It is also simply called the principal.