Glossary

Glossary

financial terms explained

Principal

In investment circles, the money you have available to invest in financial products is known as principal. If you have a maximum amount that you want to put in, that’s your principal.

In lending circles, the meaning is actually the opposite and the principal is actually the amount they are planning to loan to you.

As you can see, when discussing your principal, it is vitally important to be aware of who you are talking to.