Bi-Weekly Payments Auto Loan Calculator
Discover how making bi-weekly payments can accelerate your car loan payoff.
Calculate Your Bi-Weekly Payment Savings
Understanding Bi-Weekly Auto Loan Payments
Making bi-weekly payments on your auto loan is a strategy to potentially pay it off faster and save money on interest. This calculator focuses on the **accelerated bi-weekly payment** method.
How Accelerated Bi-Weekly Payments Work
- Calculate your standard monthly auto loan payment.
- Divide that monthly payment by two. This is your bi-weekly payment amount.
- Make this bi-weekly payment every two weeks.
Since there are 26 two-week periods in a year (52 weeks / 2), you end up making 26 bi-weekly payments. This is equivalent to 13 full monthly payments (26 half-payments = 13 full payments), rather than the standard 12 monthly payments.
That **one extra monthly payment per year** goes directly towards reducing your principal loan balance. This has two main effects:
- Interest Savings: As your principal balance decreases faster, less interest accrues over the remaining life of the loan.
- Faster Payoff: By chipping away at the principal more quickly, you shorten the overall loan term and own your car free and clear sooner.
- Lender Policy:** Not all lenders offer formal bi-weekly payment plans. Some may allow you to simply make extra principal payments. **Crucially, ensure any extra payment amount is applied directly to PRINCIPAL,** not just held to cover the next month's payment. Contact your lender to understand their process.
- Third-Party Services:** Be wary of third-party services that charge a fee to set up bi-weekly payments. You can often achieve the same result yourself by adding 1/12th of your monthly payment to each regular payment and designating it as "extra principal," or by making one extra full payment per year.
- Budgeting:** Ensure making payments every two weeks fits comfortably within your budget and cash flow cycle.
How to Use This Calculator
- Enter your total Auto Loan Amount.
- Input the Annual Interest Rate (APR) for your loan.
- Enter the Original Loan Term in Years.
- Click "Calculate Savings".
- The table compares the standard monthly plan with the accelerated bi-weekly plan, showing payment details, payoff times, and total costs. The summary below highlights the estimated interest and time saved.
Disclaimer: This calculator provides estimates for comparison. Results assume the interest rate is fixed and that bi-weekly payments are correctly applied to principal by the lender. Actual savings may vary based on lender policies, fees, or payment timing. Always consult your loan agreement and lender for precise details.
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