Is it better to make your loan payments bi-weekly or monthly?
When you pay for a loan through bi-weekly loan payments, instead of making a single loan payment each month, as you would with a traditional monthly payment plan, you can make half of a monthly payment for your loan every two weeks.
As a result, instead of making 12 payments, you make 13 full payments, or 26 half payments each year. You make an extra payment each year. The money that you contribute through this extra payment is more money that can be used to reduce the principal balance of your loan. The principal balance, of course, is the amount you initially take out for the loan.
Because the calculations of future interest are based on the amount remaining in the principal balance, the more money you can put toward paying off the principal balance, the less total money you are likely to pay in interest over the life of the loan. When you use a bi-weekly loan payment plan instead of a traditional monthly loan payment plan, not only can you pay off your total loan in less time, you will save a lot of money in interest.
Bottom Line: Making a one-half payment every other week, rather than a whole payment once a month, can let you pay off your loan faster and save money on interest in the process.
Willis-Knighton FCU offers payroll deduction for WKHS employees and will set your payments for each pay day at no charge. You don’t have to worry about writing a check or coming to a branch to make a payment, they happen automatically.
This is only one of the many advantages of financing or refinancing with WKFCU. Here are a few more:
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*APR = Annual Percentage Rate
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