Why is a principal balance not my payoff amount? (2024)

Your principal balance is not the payoff amount because the interest on your loan is calculated in arrears. For example, when you paid your August payment you actually paid interest for July and principal for August. The payoff amount also includes any escrow adjustments, release fees, and other charges and credits due on the loan.

Why is a principal balance not my payoff amount? (2024)

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