Common use of Compound interest Clause in Contracts

Compound interest. Where the borrower fails to pay the interest on due date, the lender will charge compound interest on a monthly (quarterly/monthly) basis as of the date of failure to pay on the due date. If the borrower fails to pay the interest on due date prior to the loan maturity date, the lender will charge compound interest at the loan interest rate set forth herein; upon the loan maturity date, the lender will charge compound interest at the penalty interest rate for delinquency set forth herein.