What does Capitalizing interest mean？

Capitalizing interest means adding unpaid interest to the principal balance of a loan or investment, which then becomes the new principal balance. This can happen in various situations, such as when a borrower is unable to make interest payments on a loan or when interest is earned on an investment but not withdrawn. By capitalizing interest, the borrower or investor can avoid immediate payments and instead pay interest on a larger balance over time. However, this can also result in higher overall interest costs in the long run.