Loan Principal: Everything You Need to Know
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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
Loan Principal Definition
Understanding Loan Principal
How Does a Personal Loan Principal Work?
Loan Principal vs. Loan Interest
How Does Loan Principal Affect Taxes?
Are There Any Penalties for Paying Only The Loan Principal?
Can You Pay Down the Loan Principal Faster?
Interest Payments
Shorten Loan Term
Cheaper Payments
Other Important Personal Loan Information
Borrowers can get an unsecured personal loan with no collateral Expecting mothers can use personal loans as a maternity leave loan One of the top reasons to get a personal loan is debt consolidation
Loan Amount
Loan Maturity Date
Loan Interest Rates
Monthly Loan Payments
The Takeaway
3 Personal Loan Tips
Shopping around helps ensure that you’re getting the best deal you can. Lantern by SoFi makes this easy. With one online application, you can find and compare personal loan offers from multiple lenders. If the interest rates you’re being offered seem too high, try lowering the loan amount. Generally, the larger the loan, the greater the risk for lenders, who likely charge a higher interest rate for the increased risk level.
Frequently Asked Questions
Photo credit: iStock/EmirMemedovski
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About the Author
Sulaiman Abdur-Rahman writes about personal loans, auto loans, student loans, and other personal finance topics for Lantern. He’s the recipient of more than 10 journalism awards and currently serves as a New Jersey Society of Professional Journalists board member. An alumnus of the Philadelphia-based Temple University, Abdur-Rahman is a strong advocate of the First Amendment and freedom of speech.
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