Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

A principal is an amount of money borrowed or the amount still owed. If you were to take a loan of £25,000 from the bank, for example, the principal balance would be £25,000. For every payment you make on the loan, the principal decreases.

Principal definition

A principal is an amount of money borrowed or the amount still owed. If you were to take a loan of £25,000 from the bank, for example, the principal balance would be £25,000. For every payment you make on the loan, the principal decreases.

A principal also refers to the face value (or par value) of a debt instrument. A bond with a principal of £10,000 represents a £10,000 loan to the bond issuer, and it is usually equal to the amount the bondholder will receive on the bond’s maturity date. 

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