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One way to pay off a loan faster is by making bi-weekly payments instead of once a month. This Bi-weekly Payments For An Auto Loan With Fees Calculator will help you figure out just how much you can save and how much faster you can pay off your loan by making bi-weekly payments on your car or truck. The calculator is also designed to let you take into account any additional fees charged by your lender for setting up a bi-weekly payment schedule, if applicable.
The key to a bi-weekly payment plan is that there are 52 weeks a year, but only 12 months. So if you make half a car payment every other week, rather a full payment than once a month, you make 26 half-payments – or the equivalent of 13 monthly payments a year.
That means you'll pay your loan off sooner, but by reducing your loan principle more quickly, you reduce your interest charges as well – so you save money over the life of the loan.
Bi-weekly payment schedules usually work best for people who are paid on a weekly or semiweekly basis, rather than once or twice a month. That's because they can simply set aside the same amount from every paycheck for their auto payments, whereas someone who's paid on a monthly basis would have to plan ahead for the extra half-payments, which would fall twice a year.
In many cases, you can simply send your lender a half-payment every two weeks if you wish to adopt a bi-weekly payment schedule. However, some lenders may require that you set up a payment schedule specifically for a bi-weekly plan. There's usually no charge for doing so, but in some cases lenders may require a one-time setup fee, or a transaction fee with each payment.
This calculator lets you see how much faster you'd pay off your vehicle and how much you'd save in interest with bi-weekly payments. It also lets you explore other possibilities, such as the effects of boosting your payments above the minimum required.
You can also compare the overall cost of different types of loans. For example, are you better off with a loan that charges a higher interest rate but has no fees, or would you save more with a lower rate on a loan that charges a setup fee or regular transaction fees?
Once you enter your information, the calculator will generate a detailed report comparing a bi-weekly payment schedule to monthly payments. This will give you the amount you should pay every two weeks, how much faster you'd pay off the loan and how much you'd save in interest with a bi-weekly payment schedule.
In addition, the report will show how much more equity you'd have in the vehicle at 30 months and at loan payoff with a bi-weekly payment schedule vs. monthly payments – useful information if you plan to trade up to a new car or truck around that time.
It will also calculate your effective interest rate – that is, the interest rate you'd need to save the same amount of money with a monthly payment schedule.
Enter the amount you are borrowing, interest rate and the length of the loan in months. Then enter the following, if applicable:
Note: You can click on each entry for more detailed descriptions.
When finished, click "Show report" for a detailed breakdown of the loan for both monthly and bieweekly payments.