1. What is Bi-Weekly Auto Loan Amortization?

Bi-weekly auto loan amortization calculates your payment schedule when making payments every two weeks instead of monthly. This results in 26 half-payments per year (equivalent to 13 full monthly payments), helping you pay off your loan faster and save on interest.

2. How Does the Calculator Work?

The calculator uses the bi-weekly payment formula:

Where:

• \( P \) — Principal loan amount (USD)
• \( r \) — Bi-weekly interest rate (annual rate ÷ 26)
• \( n \) — Total number of bi-weekly payments (years × 26)
• \( PMT_{biweekly} \) — Bi-weekly payment amount (USD)

Explanation: The formula accounts for compound interest over bi-weekly periods rather than monthly periods.

3. Benefits of Bi-Weekly Payments

Details: Making bi-weekly payments can reduce your loan term by several months and save hundreds or thousands in interest, as you're effectively making one extra monthly payment each year.

4. Using the Calculator

Tips: Enter the total loan amount, annual interest rate (typically 5-7% for auto loans), and loan term in years. The calculator will show your bi-weekly payment amount and total interest paid.

5. Frequently Asked Questions (FAQ)

Q1: How much faster will I pay off my loan with bi-weekly payments?
A: Typically 4-8 months faster on a 5-year loan, depending on the interest rate.

Q2: Do all lenders accept bi-weekly payments?
A: Not all do - check with your lender. Some may require setting up automatic payments.

Q3: Is there a fee for bi-weekly payments?
A: Some lenders charge a setup fee (typically $25-$50), but many don't.

Q4: How does this compare to making extra payments?
A: Bi-weekly payments are more systematic and easier to budget than occasional lump sums.

Q5: Can I switch to bi-weekly after starting monthly payments?
A: Yes, most lenders allow payment frequency changes, though terms may vary.