Understanding Biweekly Payments

At its core, the idea behind biweekly payments is simple, yet its impact on loans can be profound. Instead of making the traditional 12 monthly payments yearly, with biweekly payments, you pay half of your monthly amount every two weeks. This results in 26 half-payments or 13 total monthly payments in a year.

The beauty of this approach lies in its frequency. Paying more frequently reduces the principal balance faster, reducing the interest accumulated on that principal. Throughout a loan, this can lead to significant savings and a shorter loan term.

Our financial calculator will help you delve deeper into the mechanics and benefits of biweekly payments, offering insights into how this strategy can reshape your financial landscape.

Turning on "Power Mode" will display the results of the calculations alongside the input fields. When "Power Mode" is off, descriptive information sits alongside the input fields for a more informative learning experience.
Loan Information
$
Your loan balance is the remaining amount of money you owe on your loan. Bi-weekly payments generally apply to amortized loans, which have pre-determined fixed payments. For example, loan balance could be the amount still owed on an auto, home, or student loan.
%

The interest rate refers to the annual percentage of your loan balance charged by the lender. While many loans accrue interest monthly, always check your loan terms to understand how your interest is calculated.

$

Your monthly payment is the amount you pay each month to pay off your existing loan balance. Bi-weekly payments are generally half of a regular monthly payment.

Printer-friendly version

Monthly Payments
Bi-Weekly Payments

Interest Paid over Repayment Term
Monthly Payments Bi-Weekly Payments
Total Interest Paid

When managing loans, the repayment frequency might seem minor, overshadowed by factors like interest rates or loan terms. However, the potential benefits of biweekly payments might surprise you. By splitting your monthly payment into two and paying every two weeks, you can gain a noticeable edge in your financial journey.

This financial calculator illuminates the advantages of biweekly payments. Not only can you potentially reduce the overall interest you pay over time, but you'll also make an extra payment each year—accelerating your debt reduction without even realizing it.