Biweekly or weekly car loan payments: do they help?
Biweekly car loan payments can save interest, but mostly because 26 half-payments a year add up to 13 monthly payments instead of 12. That extra payment goes to principal and shortens the loan. Splitting a payment into weekly or biweekly pieces without paying more in total does little on its own. If your lender does not offer a biweekly plan, adding a small fixed amount to each monthly payment can get you a similar result.
This guide explains where the savings come from, compares biweekly payments with a small monthly extra in an example, and covers what to check with your lender.
Where the savings come from
A biweekly plan means paying half of your monthly payment every 14 days. There are 52 weeks in a year, so you make 26 half-payments, which equals 13 full monthly payments. The one extra payment each year reduces principal, and on a simple-interest loan that lowers every interest charge after it.
There is also a small timing effect. If each half-payment is applied as it arrives, part of your principal is repaid two weeks earlier than with a monthly payment. That trims interest a little, but much less than the extra annual payment does.
What about weekly payments?
Weekly payments of a quarter of the monthly amount give you 52 payments a year, which also adds up to 13 monthly payments. So weekly payments work in roughly the same way as biweekly payments: the extra payment each year does most of the work, and the more frequent timing adds a little more. Our calculators do not model weekly payments directly, so treat this as a general explanation rather than an exact figure.
If instead you split your monthly payment into smaller pieces that still add up to only 12 payments a year, you are paying the same total. On a loan that charges interest daily, paying parts of it earlier can save a very small amount, but the difference is usually minor.
Worked example: biweekly vs a small monthly extra
For example, take a hypothetical $30,000, 60-month car loan at 7% APR. The regular payment is $594.04 a month, and total interest paid as scheduled would be $5,642.12. We ran two options through our calculators’ code:
| Biweekly: $297.02 every two weeks | Monthly plus $49.50 extra | |
|---|---|---|
| Total interest | $5,058.91 | $5,114.34 |
| Interest saved | $583.21 | $527.78 |
| Time saved | about 4 months (119 payments) | 5 months (paid off in 55 months) |
The biweekly figures use the true biweekly method from our mortgage calculator, applied to a 5-year loan with interest charged every two weeks. The monthly figures use our car loan calculator with $49.50, one-twelfth of the payment, added each month. The biweekly plan saves a little more, $583.21 against $527.78, because of its earlier timing. The difference is small, so a fee for a biweekly program could easily outweigh it. Time saved is counted slightly differently by the two calculators, so treat it as approximate.
Check with your lender first
- Do they accept partial payments? Some lenders hold a half-payment until the full monthly amount has arrived, which removes the timing benefit.
- Is there a fee? A fee for a biweekly program, or for using a third-party payment service, can cancel out the savings on a car loan, where the interest saved is often modest.
- How is extra money applied? Make sure amounts above your regular payment reduce principal and are not treated as an early payment of next month’s bill.
- When is the payment due? Keep at least the full monthly amount arriving by each due date so the loan is never reported as late.
The simpler alternative
If your lender does not support biweekly payments, divide your monthly payment by 12 and add that amount to every monthly payment, marked as principal. Over a year that adds one extra payment, just like a biweekly plan. It needs no special setup and no fee. Our guide on how extra payments on a car loan work shows what larger extra amounts can do.
Common questions
Will a biweekly plan hurt my credit?
Not if every monthly amount is paid on time. The risk is a setup where a half-payment is not counted as a full payment, so confirm with your lender how payments will be credited.
Is paying twice a month the same as biweekly?
No. Two payments a month on fixed dates add up to 12 monthly payments a year. Biweekly payments every 14 days add up to 13.
The takeaway
Biweekly or weekly car loan payments help mainly because they add one extra monthly payment each year. The more frequent timing adds only a little. If your lender charges for a biweekly plan or does not support it, adding one-twelfth of your payment each month gets you close to the same result for free.
This guide is educational only and is not financial, tax, or legal advice. The example uses hypothetical numbers; your lender or card issuer sets your actual terms. See how our calculators work.
Some pages on SmartCashLab may include affiliate links, and if you use one we may earn a commission at no extra cost to you; this guide contains no affiliate links, and compensation never changes our calculator results. Read our affiliate disclosure.