Financial Program Listings FAQ

Understanding loan terms and responsibilities can be confusing. This FAQ provides an overview of how loans and financial programs for electric upgrades work so you can confidently make decisions.

What is a loan principal?

A loan principal is the total original sum of money that a borrower has received and agreed to repay to a lender. If you agree to repay a lender $10,000, your loan principal is $10,000.

A loan amount refers to the original sum of money owed in addition to any money that has accrued as interest on the loan principal. It is principal plus interest.

For example, if you agree to repay a lender $10,000 over ten years with a 4% interest rate, your total loan amount will start at $10,000 but will increase to more than $12,000 by the tenth year ($10,000 principal plus the $2,000 in interest). 

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