Should you decide to enroll in a biweekly payment program with your lender, you'll more than likely be entering into a contract that forces you to adhere to making twice-monthly payments no matter what.įor some, this lack of flexibility isn't ideal. While the end result of using this payment method is certainly attractive, it's not without its risks. As a result, you'll save money on interest. In today's economy, you could expect to finish paying off your loan four years sooner by making biweekly payments. Instead of going towards interest, that 'extra' payment gets applied to your loan's principal amount, meaning you'll end up reaching your loan's payoff date sooner. How Does It Work?įirst, let's take a look at how biweekly payments work.īecause there are 52 weeks in a year, sending in a payment every two weeks equals out to 26 half-payments each year, or 13 full ones. Before you take your lender up on the offer to start making biweekly payments, it's important to understand how this program works and if it's right for you. It sounds too good to be true, and it almost is.
Instead of sending in one payment each month, you send in half of your monthly payment every two weeks, effectively shaving off years from your loan. If you've recently taken out a loan or started using a credit card, chances are you've received some kind of offer from your lender to enroll in a biweekly payment program. How Biweekly Payments Can Save Borrowers Money
