payment at the end of the year?
2007-04-30 15:16:22 · 4 answers · asked by erika 2 in Business & Finance ➔ Credit
No, it is not the same
Interest is charged on the amount of money that you owe
each month so it you make bi-weekly payments you
pay interest for 14 - 15 days
Assume the following, First payment due July 1 2007
a loan of $75,000 @ 30 years Interest is 10%
payment is $658.18 x 12 (payments per yr)
A standard monthly payment would pay off the loan
July 1 2037
Adding one additional payment per year and the loan
is paid off $658.18 x 13 (payments per yr)
9/1/2028
Making your payment bi-weekly the loan would pay off
7/1/2027 329.09 x 26 (payments per yr)
It is close but not quite the same and you save a ton
of money doing this.
a previous poster stated that bi-weekly was an obligation
this is not necessarily true, you can have a loan with
monthly payments and decide on your own that you want
to make you payments bi-weekly, your only obligation is
to make the FULL monthly payment each month.
The making of bi-weekly payments in this situation is
also at your discretion, you do not have to do it every
month if you do not want or can not afford it .
2007-04-30 15:38:26 · answer #1 · answered by justgetitright 7 · 0⤊ 0⤋
No. A bi-weekly mortgage is an obligation. You must do it. An extra payment is at your discretion. Also, you should get a better rate, since you are promising to pay it off faster.
2007-04-30 15:34:47 · answer #2 · answered by Ted 7 · 0⤊ 0⤋
In the end it's about the same. There may be some small difference if your interest is compounded monthly rather than annually.
2007-04-30 15:28:31 · answer #3 · answered by calliope320 4 · 0⤊ 0⤋
Yes
2007-04-30 15:28:19 · answer #4 · answered by Terrie 3 · 0⤊ 1⤋