Payment Frequency

Payment frequency determines how often you make loan payments. Most people think only monthly matters, but switching to bi-weekly or weekly payments can save thousands in interest and shave years off your loan.

The Four Main Frequencies:

1. Monthly (12 payments/year)

• Standard for most loans and mortgages
• Easiest to budget with monthly bills
• Baseline for comparison

2. Bi-Weekly (26 payments/year)

• Every 2 weeks (not twice per month!)
• Equals 13 monthly payments per year
• Most popular accelerated payment strategy

3. Semi-Monthly (24 payments/year)

• Exactly twice per month (1st and 15th)
• Common for salaried employees
• Equals 12 monthly payments per year (no acceleration)

4. Weekly (52 payments/year)

• Every week
• Equals 13+ monthly payments per year
• Fastest acceleration, but requires discipline

Why Bi-Weekly is Magic:

The Math: A $300,000 mortgage at 6.5% for 30 years:

Monthly payment: $1,896/month

• Annual total: $1,896 × 12 = $22,752

Bi-weekly payment: $948 every 2 weeks

• Annual total: $948 × 26 = $24,648
• Extra principal: $1,896/year

Results:

• Payoff time: 25.5 years (save 4.5 years!)
• Total interest: $313,000 vs $382,000
• Interest saved: $69,000

Why It Works:

1. More frequent principal reduction: Every 2 weeks, you chip away at the balance
2. Less time for interest to accrue: Lower average daily balance
3. One extra payment per year: 26 bi-weekly = 13 months worth
4. Aligns with paychecks: Most people get paid bi-weekly

The Bottom Line: If you get paid bi-weekly, matching your loan payment frequency can save thousands without feeling like a sacrifice. It's one of the easiest "financial hacks" that actually works.