Lainasumma

Lainasumma is a Finnish financial term referring to the principal amount of a loan—the sum borrowed from a lender before interest, fees, and repayments. It is the basis for calculating interest and the scheduled amortization and is distinct from the total amount repaid, which includes interest and fees, as well as from the current outstanding balance, which is the remaining portion of the principal after partial repayments.

In practice, the initial lainasumma equals the amount disbursed to the borrower. Interest is charged on the outstanding principal, and periodic payments are typically allocated first to interest and then to reducing the lainasumma. As payments are made over time, the outstanding balance declines toward zero, and at payoff the entire lainasumma has been repaid. In amortizing loans, the mix of principal and interest in each payment shifts over the term, with a larger share of early payments going to interest.

For fixed-rate loans, the lainasumma largely determines the size of regular payments; all else equal, a higher principal or a longer term increases total interest paid over the life of the loan. A common approximation for fixed-rate loans uses the monthly rate and number of payments to compute a constant payment amount, illustrating how lainasumma drives the repayment schedule.

Lainasumma appears in various loan types, including consumer loans, mortgages, student loans, and business financing, and is a standard element in Finnish banking documentation and financial reporting.