Biweekly Payoff Formula:
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The Biweekly Payoff Calculator estimates how long it will take to pay off a loan when making payments every two weeks instead of monthly. This payment strategy can significantly reduce payoff time and interest costs.
The calculator uses the following formula:
Where:
Explanation: The formula calculates the number of biweekly periods required to pay off the loan completely, which is then converted to years and months.
Details: Making biweekly payments (half your monthly payment every two weeks) results in 26 half-payments per year, which equals 13 full monthly payments instead of 12. This extra payment goes entirely toward principal, reducing payoff time and interest costs.
Tips: Enter your current loan balance, annual interest rate (as a percentage), and the biweekly payment amount you plan to make. All values must be positive numbers.
Q1: How much faster will I pay off my loan with biweekly payments?
A: Typically 4-8 years faster on a 30-year mortgage, depending on the interest rate and payment amount.
Q2: Is there a fee to switch to biweekly payments?
A: Some lenders charge a setup fee, but you can often achieve the same effect by making extra principal payments yourself.
Q3: How does this compare to making one extra monthly payment per year?
A: The effect is similar, but biweekly payments spread the extra payment throughout the year.
Q4: Can I use this for any type of loan?
A: Yes, the calculator works for mortgages, car loans, personal loans, and other amortizing loans.
Q5: What if my payments change over time?
A: This calculator assumes consistent payments. For variable payments, you would need a more complex amortization schedule.