biweekly repayment method

Introduction

The bi-weekly repayment method uses two payments per month instead of one payment to pay back any type of loan. By using the bi-weekly repayment method, you can significantly reduce the amount of interest paid over the entire loan and shorten your loan repayment schedule.

Benefits

The biggest benefit of using the bi-weekly repayment method is that you are paying down your loan balance more quickly. When you make the bi-weekly payments, you are making the equivalent of one extra monthly payment towards your loan balance.

The second major benefit of the bi-weekly repayment method is that you are reducing the amount of total interest you pay on the loan. By paying down your loan balance at an accelerated pace, you are able to reduce the amount of total interest paid to the lender.

Drawbacks

The first drawback to the bi-weekly repayment method is that it may not be available for all types of loans. Some lenders may offer a bi-weekly repayment option for certain loans, but not for all loans. This means that you may have to shop around to find a lender who offers this option.

The second drawback to the bi-weekly repayment method is that it requires more discipline on your part to keep up with the payments. By making two payments per month instead of one payments, you must ensure that you do not miss any payments. Consequently, if you do miss payments, you may end up paying a higher amount of interest due to the missed payments.

Conclusion

The bi-weekly repayment method can be an effective way to shorten your loan repayment period and reduce the amount of total interest you pay on your loan. However, it is important to make sure that you are able to stay disciplined and make the bi-weekly payments on time in order to get the maximum benefit from this method. This makes it important to only use this repayment method if you are sure that you will be able to stick to the repayment schedule and make the payments on time.

Biweekly payments, also known as a biweekly repayment or bi-weekly or fortnightly repayment scheme, is a scheme in where you can repay your loan with installment in 2 weeks. Under this scheme, you have to pay half of the amount of the loan due, together with the resulting interest, every 2 weeks. Compared to monthly repayment scheme, biweekly repayment scheme has some advantages and disadvantages.

Advantages:

1. Short-term savings: You can accelerate the repayment of debt with this repayment scheme at a fixed rate and benefit from short-term savings. As you are making more payments each year, its easier to foreclose the loan before the end of the loan period.

2. Reduced Tax burden: As the interest amount paid by you reduces, you will find a reduction in the tax amount to be paid.

Disadvantages:

1. Upfront Fee: The lender may charge an upfront fee for this repayment scheme.

2. Extra Effort: While selecting this repayment form, you might have to match up with the lender regarding the due date and make more efforts to ensure that the payments are made without fail every two weeks.

Overall, biweekly payment plan can be a great way to to pay off debt ahead of time, reduce the amount of interest paid, and save money on taxes. However, it is essential to have a thorough knowledge of the entire repayment process and associated fees to make an informed decision.