Principal (hovedstol)
Also known as principal amount, base claim, outstanding balance, hovedstol, grundkrav, restgæld
The principal is the original claim, excluding interest, fees and costs.
- Consists of
- The invoice amount
- Excludes
- Interest, fees, collection fee
In practice
The principal is what the debtor actually owes: the invoice amount. Everything else — reminder fees, the compensation fee, the collection fee, default interest — sits on top of the principal and together makes up the total claim.
The distinction is not cosmetic. Interest is calculated on the principal, not on the total claim, and in every collection provider’s pricing structure it is the principal that any success fee is measured as a percentage of. When we write that you keep the entire principal, that is exactly what it means: the original claim goes to you undiminished.
If the debtor pays only part of the amount, the payment is as a rule appropriated first to costs and interest and then to the principal — unless otherwise agreed. That is why the principal can stand unchanged even though money has come in.
Where it commonly goes wrong
- Interest is calculated on the total claim. That is too much. Default interest accrues on the principal.
- Part payments are booked against the principal first. The interest calculation then comes out wrong, and the claim looks smaller than it is.