põhivõlga

Põhivõlg refers to the principal amount of a debt, excluding any accrued interest or fees. It represents the original sum of money that was borrowed or owed. When a loan agreement is established, the põhivõlg is the base amount that the borrower commits to repay over a specified period.

In debt repayment scenarios, payments are typically allocated first to cover any outstanding interest, and then the remainder of the payment reduces the põhivõlg. As the põhivõlg decreases, the amount of interest charged in subsequent periods also diminishes, assuming a fixed interest rate. Understanding the põhivõlg is crucial for borrowers to track their progress in paying off a loan and for lenders to manage their financial assets.

The concept of põhivõlg is fundamental in various financial contexts, including mortgages, personal loans, business loans, and bonds. It is the core amount upon which the entire financial obligation is built. For instance, when calculating amortization schedules, the initial põhivõlg is the starting point, and each payment systematically reduces this amount. The total repayment will, therefore, be the põhivõlg plus the cumulative interest and any applicable charges.