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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.
IG Smart Portfolios
Invest in an expertly managed portfolio, at a fraction of the cost of traditional wealth managers and independent financial advisors (IFAs), with an IG Smart Portfolio.
The value of shares, ETFs and ETCs bought through a share dealing account, a stocks and shares ISA, a SIPP or an IG Smart Portfolio can fall as well as rise, which could mean getting back less than you originally put in. Spread bets and CFDs are leveraged products and can result in losses that exceed deposits. Spread betting and CFD trading are not permitted within the IG SIPP. Please ensure you fully understand the risks and take care to manage your exposure.
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