Auto Biweekly Loan Calculator

Biweekly Loan Payment Formula:

\[ PMT = P \times \frac{r \times (1 + r)^n}{(1 + r)^n - 1} \]

Biweekly Payment:

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1. What is the Biweekly Loan Payment Formula?

The biweekly loan payment formula calculates the payment amount for a loan when payments are made every two weeks instead of monthly. This approach can save interest and shorten the loan term.

2. How Does the Calculator Work?

The calculator uses the biweekly payment formula:

\[ PMT = P \times \frac{r \times (1 + r)^n}{(1 + r)^n - 1} \]

Where:

$ P $ — Principal loan amount ($)
$ r $ — Biweekly interest rate (annual rate ÷ 26)
$ n $ — Total number of biweekly payments (years × 26)

Explanation: The formula accounts for compound interest over the biweekly payment periods.

3. Benefits of Biweekly Payments

Details: Making biweekly payments instead of monthly can result in one extra payment per year, potentially reducing the loan term and total interest paid.

4. Using the Calculator

Tips: Enter the principal amount, annual interest rate, and loan term in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How does biweekly compare to monthly payments?
A: Biweekly payments (26 per year) are equivalent to 13 monthly payments, helping pay off the loan faster.

Q2: How much can I save with biweekly payments?
A: Savings depend on the loan amount and term, but typically reduces term by several years on a 30-year loan.

Q3: Are there any downsides to biweekly payments?
A: Requires more frequent payments and may not be offered by all lenders without fees.

Q4: Can I use this for any type of loan?
A: The formula works for any amortizing loan (auto, mortgage, personal), but check with your lender for specific terms.

Q5: How is interest calculated biweekly?
A: Interest is calculated as (annual rate ÷ 26) on the current balance for each biweekly period.