Principal

1. In agency law, an individual or other legal person represented by an agent.
2. In law, a legal person acting on their own behalf.
3. The amount of an investment or a loan, excluding any interest. When the whole of a loan is drawn down at the start, the principal is simply the amount originally borrowed.
4. The reference amount of a traded financial instrument, used to determine its future cashflows.
5. Most important, or largest.

The concepts of 'principal' above, should not be confused with principle, which is different.

See also

• Acceleration
• Agency
• Agent
• Arm’s length principle
• Coupon rate
• Dual currency bond
• Foreign currency bond
• Forward forward contract
• Interest
• Non-performing loan
• Paying agent
• Point
• Self-financing loan
• Separate personality principle
• Annuity factor
• Instalment