Biweekly Payment Calculator
See how biweekly payments can make it easier to eliminate your debt quickly.
Our biweekly payment calculator can do more than save you money on your total debt payment. Use this calculator to determine your best course of action to paying debt. You may already know that if you pay minimum payments once per month, you’ll end up paying a fortune because of your annual interest rate.
One of the simplest (and least known) ways to eliminate debt quickly is to switch from a monthly payment schedule to a bi-weekly payment schedule. It sounds a little counterintuitive, but this means you make two extra payments every year, so you eliminate your debt faster.
Using the Biweekly Payment Calculator
The interest and time saved from this tool’s help may be the best solution for your financial situation. Acting on this strategy, you’ll see the rate debt is paid and wonder why you didn’t do it sooner. Sort your debts from highest interest rate to lowest and employ a biweekly payment to accelerate debt payoff.
Here’s how it works:
- With a monthly payment schedule, you make 12 payments in a year.
- When you go to a bi-weekly payment schedule, the payment amount is about half of what you pay on a monthly plan.
- HOWEVER, on a bi-weekly payment schedule, you make 26 payments in a year (52 weeks in the year, divided by 2).
- So, while your payments are roughly half of what you pay on a monthly schedule, because you make 26 payments instead of 24, you wind up paying more debt off every year.
The faster you pay off debt, the less interest gets added. Since interest accrues at the end of every month, debt restructuring means fewer months where interest charges add to your total bill.
Why should I use this payoff method?
Think about it – for every year you use a bi-weekly schedule, that’s one less month of added interest on your loan or that line of credit. That can be a considerable difference with loans like your mortgage or even just on your credit cards. For a 4-year auto loan, that would mean you could finish paying the full amount off in the first few months of that last year. With a mortgage, you could save years on the payoff, which would save you thousands of added interest.
Consider taking your highest rate debt and using this tactic to reduce the total payment amount. You can also use our loan calculator to see if you can afford more debt. Compare the costs of paying once per month, versus twice per month. You’ll see your principal balance begin to diminish before long, and you’ll save in total interest charges.
The calculator below can help you assess the value of moving to a bi-weekly payment schedule on a single line of credit. If this looks like a good option, call your lender to see if they’ll allow you to adjust your payment schedule. If you have multiple loans you want to restructure, look online for a reputable debt restructuring service provider.
It’s important to note that restructuring and debt consolidation are two different things. Debt restructuring won’t save you money every month or every year. You may end up paying slightly more so you can eliminate your debt efficiently. Debt consolidation is where you can reduce your monthly payments, so it’s easier to eliminate debt on a restricted budget. As always, if you have a question or need more information, call Consolidated Credit today at (844)-402-3073 or complete our Debt Analysis form to request help online.
A free debt evaluation with a trained credit counsellor can help you zero in on the best option to consolidate for your situation.