1. What is a Loan Payoff Calculator With Biweekly Payments?

Definition: This calculator determines how many biweekly payments are needed to pay off a loan, accounting for the accelerated payment schedule.

Purpose: It helps borrowers understand how making biweekly instead of monthly payments can reduce their loan term and total interest paid.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• \( n' \) — Number of reduced biweekly payments (unitless)
• \( P \) — Loan principal (USD)
• \( r \) — Periodic interest rate (decimal)
• \( M_{bi} \) — Biweekly payment amount (USD)

Explanation: The formula calculates how many biweekly payments are needed to amortize the loan completely, considering the more frequent payment schedule.

3. Importance of Biweekly Payment Calculation

Details: Making biweekly payments (half the monthly amount every two weeks) results in 26 payments per year (equivalent to 13 monthly payments), which can significantly reduce the loan term and interest paid.

4. Using the Calculator

Tips: Enter the loan principal in USD, interest rate as a decimal (e.g., 0.05 for 5%), and your planned biweekly payment amount. All values must be > 0.

5. Frequently Asked Questions (FAQ)

Q1: How does biweekly payment help pay off loans faster?
A: By making 26 half-payments per year (equivalent to 13 full payments), you effectively make one extra monthly payment each year, reducing principal faster.

Q2: What's the difference between biweekly and semimonthly?
A: Biweekly means every two weeks (26 payments/year), while semimonthly means twice per month (24 payments/year).

Q3: How do I convert monthly to biweekly payments?
A: Divide your monthly payment by 2 to get the biweekly amount.

Q4: What if my payment doesn't cover the interest?
A: The calculator will show an error if your payment is too low to cover the accruing interest.

Q5: How accurate is this calculation?
A: It provides a theoretical estimate; actual terms may vary based on lender policies and exact payment dates.