Why you need to choose bi-weekly loan repayments

Why bi-weekly loan repayments are the best

Why you need to choose bi-weekly loan repayments

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You have the choice of your loan repayment options. You need to pick bi-weekly loan repayments, regardless of the loan type.

There are some loans that you want to avoid as much as possible. I will say a car loan is one of them, but the truth is that a lot of people simply can’t afford a car without a loan.

Whatever type of loan you get, it’s important to pay them bi-weekly. Actually, as a Brit, I hate that term. Bi-weekly to me would be twice a week. It’s bi-monthly or every fortnight, but that’s just a case of different countries speaking the same language and meaning different things. I know it is bi-weekly to North Americans so I will stick to that term.

You’ll set a date once every two weeks to make your payments. This can often be whatever day of the week you want, with a lot of people choosing the same day or the day after they get paid.

Why bi-weekly payments are better for your loan repayments

Your loan repayments have to be made. There’s no way around it. But why shouldn’t you choose monthly. Isn’t that better for your finances?

Well, you’re likely to get paid twice a month at least. Some people are paid on set days of the month while others are paid every other week. It all depends on your company. Either way, you get two paychecks a month at least that you can use.

Setting up bi-weekly loan repayments is a great way to save money in the long run. You end up with 26 payments per year—usually, two per month. If you paid monthly, you would only have 12 payments. While yes, you’re paying more per month as you pay double with the two payments with each month, you end up paying less off each year. There are some months of the year where you’ll end up with three payments in the month instead of just one (or even just two if you opt for two set dates per month).

Bi-weekly payments will give you that extra week. You end up clearing more of the principal on your loan, reducing the interest on your overall loan.

MORE: 3 reasons to pay yourself first in your budget

How are you managing your loan repayments? Do you need help to manage your money better? Let me know in the comments below.

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Alexandria Ingham is a professional writer. She predominately ghost-writes in various niches, including fitness, finance and technology Everything is fully researched and well-written. Under her own name, she writes in the technology, business, history and weight loss niches

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