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Due Principal (definition)

The amount of principal that has come due on a loan minus the amount that has been paid.

Due principal, simply put, equals the amount of principal that has come due on a loan minus the amount that has been paid.

Principal That Has Come Due - Principal Paid = Due Principal

When a payment comes due, any portion of the payment that is allocated to principal will become part of due principal and increase the due-principal amount. When principal is paid, it will lower the due-principal amount.

Due principal has nothing to do with recency or payment amount. The waterfall application of a payment determines how the payment will apply to the separate loan components (e.g. interest, fees, principal). Waterfall application is determined by the payment type.


Written by Andy Morrise

Updated on March 7th, 2023

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