BI-Weekly Car payments does it help?

[PutThatMoneyOnTheTable]

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@pinkandgrey wrote:

Yes. It's not going to make a HUGE and noticeable immediate difference, but it does help.

Higher total balance = higher daily interest 

So the sooner you pay down the loan (decreasing the total balance and therefore decreasing the daily interest), the fewer days you spend at the higher interest. 

I'm not good at explaining things, but hopefully that made sense lol 

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It does make sense. Interest is computed on the daily balance. Paying biweekly reduces the daily balance used to calculate interest instead of paying monthly. 

To add paying biweekly adds an extra month of payment (if that makes sense). 2 months out of the year where you get that third paycheck.

I pay biweekly and my next payment is due March 2020.

[pinkandgrey]

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@PutThatMoneyOnTheTable wrote:

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@pinkandgrey wrote:

Yes. It's not going to make a HUGE and noticeable immediate difference, but it does help.

Higher total balance = higher daily interest 

So the sooner you pay down the loan (decreasing the total balance and therefore decreasing the daily interest), the fewer days you spend at the higher interest. 

I'm not good at explaining things, but hopefully that made sense lol 

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It does make sense. Interest is computed on the daily balance. Paying biweekly reduces the daily balance used to calculate interest instead of paying monthly. 

To add paying biweekly adds an extra month of payment (if that makes sense). 2 months out of the year where you get that third paycheck.

I pay biweekly and my next payment is due March 2020.

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Wow, this was so much better and more concise lol. What he said ^^

[Creditdummy123]

Was about to type the same thing....

I am not sure on the forum rules about posting external links but if you do a google search for "biweekly car payment calculator with extra payment" the first couple of pages are pretty good. It compares side by side how much you save and how much sooner you pay the loan off with charts and stuff. It is almost like refinancing. I had a loan that was close to 13% with capital one and doing bi weekly payments and sending $25 extra per payment was equal to having the car financed at 8%. I was able to refinance with penfed at around 6% a year later and continued doing the bi weekly payments sending the same amount I was sending to capital one since I was already used to that payment.

It is awesome most banks don't mind. But you can always call and double check with them. capital one was the one that gave me the idea. The only time I would not use this method is if you are getting 0% financing or if your bank has a penalty for paying off the loan early.  

Just took out a boat loan for 12 years. If I do it once a month i would pay 30K in interest alone. bi weekly with extra payments for them too!

[randomguy1]

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@pinkandgrey wrote:

Yes. It's not going to make a HUGE and noticeable immediate difference, but it does help.

Higher total balance = higher daily interest 

So the sooner you pay down the loan (decreasing the total balance and therefore decreasing the daily interest), the fewer days you spend at the higher interest. 

I'm not good at explaining things, but hopefully that made sense lol 

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It makes sense. To make this a little easier, I pay my next balance the soonest possible day it lets me without the payment being principal only (after you make the minimum).

[Anonymous]

You can try refinancing with State Farm Bank. They lowered my interest rate by 7 points a couple of years ago. They also include GAP protection with their financing so if you purchased it separately when you bought your vehicle(s) you can cancel it and get a refund. One thing that sucks with them though is that you can’t setup auto pay, you have to setup every payment individually. Some people don’t even know that State Farm does loans.