1. What is Biweekly Loan Amortization?

Biweekly loan amortization involves making payments every two weeks instead of monthly. This results in 26 half-payments per year (equivalent to 13 full monthly payments), which can significantly reduce the loan term and total interest paid.

2. How Does the Calculator Work?

The calculator uses the standard amortization formula adjusted for biweekly payments:

Where:

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

Explanation: The formula calculates the fixed payment amount required to pay off a loan over a specified term, accounting for compound interest.

3. Benefits of Biweekly Payments

Details: Making biweekly payments can shorten your loan term by several years and save thousands in interest. Adding extra monthly payments amplifies these benefits.

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

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.

Q2: Is there a downside to biweekly payments?
A: The main consideration is budgeting for more frequent payments, though each payment is about half of a monthly payment.

Q3: How do extra monthly payments affect the loan?
A: Extra payments are applied directly to principal, further reducing interest and shortening the loan term.

Q4: Can I switch back to monthly payments?
A: Yes, but check with your lender as some may charge fees for payment frequency changes.

Q5: Are all loans eligible for biweekly payments?
A: Most are, but some lenders may require enrollment in a biweekly program or charge fees.