{“data”:"## Unveil Your Loan’s True Starting Point: Original Principal Balance
The original principal balance on a loan represents the loan amount before any payments are made. For instance, a loan amounting to $130,000 will have an original principal balance of $130,000. This initial balance serves as the baseline for future loan repayments but does not encompass the entirety of what the borrower will pay over the life of the loan. Lenders will add interest as well as other associated fees.
The Reality Beyond the Initial Loan Amount
It’s crucial to understand that $130,000 is not the only figure you\u2019re obliged to repay. On top of the principal, lenders impose interest, which accrues over time, and additional fees for closing the loan. Closing costs are typically not included in the original principal balance unless you decide to consolidate them within the loan amount.
Importance of the Amortization Schedule
An amortization schedule details the payment plan for your loan, highlighting both the principal and the interest portions of each payment. Verify that the original principal balance on this schedule matches what you expect to borrow. Any discrepancies should be flagged and discussed with your lender before finalizing your loan documents to ensure transparency and accuracy.
Take proactive steps to secure your financial well-being by understanding these key concepts.",“type”:“Text”}
Related Terms: principal balance, loan amount, mortgage payment, closing costs, amortization, interest rate
