Which term refers to the amount of money a borrower must pay on a loan that has been borrowed?

The term that refers to the amount of money a borrower must pay back on a loan is "principal." In the context of borrowing, the principal is the original sum of money borrowed or lent, distinct from interest, which is the additional amount charged by the lender for the service of providing the loan.

When a person takes out a loan, they receive a specific amount of money (the principal), and over time, they are required to pay back not only that original amount but also interest, which is a fee for borrowing.

Understanding the role of principal is crucial for anyone involved in borrowing money, as it forms the basis of the repayment structure. If a borrower takes out a loan of $10,000, for example, that $10,000 is the principal amount that they will eventually need to repay, excluding any accrued interest.