The principle of sequential minimization of entropy loss (SMEL) is introduced and justified within the context of biopolymer folding in vitro. This principle implies that at each stage in the dominant folding pathway, the conformational entropy loss associated with loop closure, ΔSloop, is minimized while the number of effective contacts is maximized. The applicability of the SMEL principle is contingent upon a rigorous and reliable derivation of the contribution ΔSloop. This derivation is carried out in this work for RNA by taking into account the orientational restrictions associated with the self-energy of charged phosphate moieties within a loop. The predictive potential of the principle is revealed by showing that the theory reproduces the biologically competent secondary structures of specific catalytically competent RNA's.