additional principal payment

Definition

A payment by a borrower of more than the scheduled principal amount due in order to reduce the principal. This also enables the borrower's future interest payments to be reduced.

Use this term in a sentence

You may want to try and ask for an additional principal payment if you think that it is needed for what you are loaning.

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They made an additional principal payment and that meant that things were looking as though they would change and get worse.

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The additional principal payment that Dave made really helped in lowering the overall interest on his mortgage and he was motivated by that fact.

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additional premium additional voluntary contributions