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Unpaid principal balance (UPB) is the portion of a loan (e.g. a mortgage loan) at a certain point in time that has not yet been remitted to the lender. [1]For a typical consumer loan such as a home mortgage or automobile loan, the original unpaid principal balance is the amount borrowed, and therefore the amount the borrower owes the lender on the origination date of the loan.
The unpaid accrued interest is then capitalized monthly into the outstanding principal balance. The result of this is that the loan balance (or principal) increases by the amount of the unpaid interest on a monthly basis.
For a fully amortizing loan, with a fixed (i.e., non-variable) interest rate, the payment remains the same throughout the term, regardless of principal balance owed. For example, the payment on the above scenario will remain $733.76 regardless of whether the outstanding (unpaid) principal balance is $100,000 or $50,000.
Announces Agreements to Sell $532 million of Unpaid Principal Balance in Classified and Non-Performing Commercial Loans SAN JUAN, Puerto Rico--(BUSINESS WIRE)-- First BanCorp. (the "Corporation ...
The principal balance, in regard to a mortgage, loan, or other debt financial contractual agreements, is the amount due and owed to satisfy the payoff of an underlying obligation. It is distinct from, and does not include, interest or other charges.
The amount of the monthly payment at the end of month N that is applied to principal paydown equals the amount c of payment minus the amount of interest currently paid on the pre-existing unpaid principal. The latter amount, the interest component of the current payment, is the interest rate r times the amount unpaid at the end of month N–1 ...
In the case of an amortizing bond, it is the unpaid principal = outstanding principal amount (OPA) = principal balance. In the case of an accreting bond, where the principal increases with the accumulation of notional coupons that are not paid, Principal means principal balance (after the previous coupon). The latter is the most general ...
In the United States, a five- or ten-year interest-only period is typical.After this time, the principal balance is amortized for the remaining term. In other words, if a borrower had a thirty-year mortgage loan and the first ten years were interest only, at the end of the first ten years, the principal balance would be amortized for the remaining period of twenty years.