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    principalnoun

    the original sum of money loaned under a loan agreement
    The proposed legislation will help investors recover principal money secured by a charge on land or personal property.

    Definitions & Examples

    • the original sum of money loaned under a loan agreement
      The proposed legislation will help investors recover principal money secured by a charge on land or personal property.
    • a person who uses another to act as his or her representative
      An agent cannot bind its principal when it exceeds (= goes beyond) the limits of its authority.

    Other

    • principal amount
    • principal money

    Phrase Bank

    • You deposit a principal amount with a bank (or large building society) and at the end of the maturity period you are repaid the principal, with interest.
    • Zaharoff was retained as principal overseas agent.
    • In fact, evidence indicates that former principals of Sotheby's acquired ownership.
    • She is a former Principal of St. Anne's College.

    Additional Notes

    • When principal is used to mean primary, chief or most important, it is both a noun and an adjective, though usually an adjective in non-legal usage: A faulty gasket was the principal reason for the engine's failure.
    • In general usage, principal refers to a person who plays an important role or holds a high position. In legal and financial English principal is often a noun (derived from principal person). In the law of agency, the principal is the one on whose behalf the agent acts: She attended the meeting as the agent of a principal who wished to remain anonymous.
    • In banking the principal (sum) is money invested or borrowed on which interest is paid: The borrower was only able to make the minimum payment, which covered the interest but did not reduce the principal.

    Common Mistakes

    • Principal and principle are often confused as they have the same pronunciation, but have different meanings.

      Principle means doctrine, standard, rule, or law, and is nearly always used as a noun: A principle of management is to treat your employees as you want them to treat your customers.