When Dealing With a Loan, Who Benefits From Compounding Interest More Frequently, and Why? When dealing with a loan, one important factor to consider is compounding interest. Compounding interest refers to the process of earning interest on both the principal amount and the previously earned interest. This means that the interest on a loan grows over time, which can have a significant impact on the total amount paid … Continue reading When Dealing With a Loan, Who Benefits From Compounding Interest More Frequently, and Why?