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Looking to save money on a car loan? You might consider making bi-weekly payments. Making a payment every other week, rather than once a month, can let you pay off your loan faster and save money on interest in the process. Most auto lenders allow you to do this without penalty or requiring any special approval or restructuring the loan. You simply make a payment every other week rather than once a month and the bank credits it to your loan. This Bi-weekly Payments for an Auto Loan Calculator will figure out just how much you can save and how much faster you can pay off your car loan by going to a bi-weekly schedule, and provide you with your bi-weekly payment as well. It'll also provide you with an amortization table so you can see just how quickly you'll pay down the loan and what your remaining balance will be at any given time.
Your savings primarily come from the fact that paying every other week means you'll be making 26 half-payments a year – the equivalent of 13 monthly payments. So you're basically making an extra monthly payment each year.
This doesn't mean you'll simply lop off one month from your auto loan every year. By paying down your loan more quickly, you'll also pay less interest – which will help pay off your loan even faster. The calculator will show you just how quickly, depending on your loan amount, interest rate and length of the loan.
Of course, making the equivalent of 13 monthly payments a year means you have to come up with the cash to make that extra annual payment. So this setup tends to work best for people who get paid every other week, rather than once or twice a month. These people get the equivalent of an extra paycheck a year, compared to their monthly bills, so the every-other-week cycle can work out very well for them.
Others can use the bi-weekly payment approach as well. Making payments every other week and being prepared for that occasional extra payment can be good financial discipline and eventually free up your money for other purposes.
This calculator is pretty straightforward. Begin by entering your anticipated date of your first payment, the loan amount, interest rate and length of the loan in months. You can also enter a monthly prepayment amount if you wish to make any additional regular payments to pay the loan off even faster.
The calculator will take all this into account and will calculate your bi-weekly payment amount, your total interest savings and how much faster you will pay off your auto loan. If you wish to see what effect changing any of the basic values would have – varying the loan amount, interest rate, length, etc. – you can adjust those using the green triangles at right.
When you hit "Show report" the calculator will produce an amortization schedule that will provide a month-by-month comparison of just how much faster you'd pay off your loan and how much interest you'd save with bi-weekly payments. (Because it's a month-by-month tally, it shows a larger monthly payment every six months to reflect the impact of biweekly payments).
Because the amortization schedule gives you a running tally of how fast you'll pay down your auto loan, you can also use it to figure out how much you''ll still owe on the car at any point in the future, if you're thinking about trading it in before it's completely paid off.
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