# Principal

*Borrowing & Credit — Finicade finance glossary*

The original sum borrowed or invested, before any interest. On a loan, each payment is split between interest and paying the principal down; early on it's mostly interest, which is why balances shrink so slowly at first.

**Related terms:** [Interest Rate](https://finicade.com/glossary/interest-rate), [Amortization](https://finicade.com/glossary/amortization), [Mortgage](https://finicade.com/glossary/mortgage)

**Taught in:** Money Basics — Interest: Money That Makes Money

Source: https://finicade.com/glossary/principal