Interest is a charge an individual pays for the use of borrowed funds. When a person enter repayment they not only have to pay the principal (sum initially borrowed) but also an extra fee of interest on that borrowed money.
Particularly, the interest rate (l/m) is a percent of principal (P) paid a certain amount of times (m) per period (generally quoted per annum).
Benefits of Paying Interest
Making payments on your interest notice can reduce the amount of interest that will capitalize when your account enters repayment. Because less or no interest will be computed to your original loan amount, your monthly payment will be a smaller amount.