The Walters are adding $134.46 to their new monthly payment of $902.44 to reduce the loan principal.

This payment increase is applied toward the loan principal instead of the interest, as it would be in a graduated mortgage payment.

One point equals one percent of the loan principal, and usually reduces the interest rate by 1/8% (0.125).

A logical step, it may seem, but banks normally charge between 2 and 4 percent of the loan principal as their fees for such refinancing.

In one option, the loan principal would be cut 35 percent, the same reduction offered in the first deal, reached with Mexico, in 1989.

The loan principal consists of the taxes that would be due on income that individuals set aside until retirement.

Interest will continue to accumulate but will no longer be capitalized (added to the loan principal).

Usury - the accumulation of interest on loan principal - is prohibited by the texts of some major religions.

The lender is under pressure to recover the loan principal and begins court action to take title to the property involved.

Another currency swap structure is to combine the exchange of loan principal, as above, with an interest rate swap.