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Cars · RATIOXA GLOSSARY

Principal repayment

Part of a loan payment that reduces debt rather than paying interest.

01

Simple definition

Part of a loan payment that reduces debt rather than paying interest.

02

Why it matters

This term changes how inputs, cash flows or results should be interpreted. RATIOXA keeps it explicit so two options are compared on the same basis.

03

Worked example

Of a €600 payment, €450 may initially repay principal and €150 pay interest.