A tool that calculates the payment schedule for an automotive loan when repayments are made every two weeks instead of monthly. It allows users to input the principal loan amount, annual interest rate, and loan term to determine the biweekly payment amount and the total interest paid over the life of the loan. For example, entering a $25,000 loan at 6% interest over 60 months will yield a specific biweekly payment amount, typically lower than half the monthly payment would be.
This method of loan repayment offers the potential to reduce the total interest paid and shorten the loan term. Because there are 52 weeks in a year, biweekly payments effectively result in 26 payments annually, equivalent to 13 monthly payments. The additional payment each year is applied directly to the principal balance, accelerating the loan payoff. Historically, while monthly installments have been the standard, the option for accelerated payments, including biweekly schedules, has gained traction as borrowers seek ways to manage debt more efficiently and reduce overall borrowing costs.
