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How Many Bi-weekly Payments in 84 Months

How Many Bi-weekly Payments in 84 Months

Taking out a 6 or 7-year auto loan has become increasingly common for Canadian drivers. With new vehicle prices rising, longer loan terms spread out payments to make buying more affordable. But these extended loans also mean paying much more in interest charges over the long run. For a $40,000 vehicle, an 84-month loan at 9% interest adds up to over $12,000 in interest paid by the end of the 7-year term. That’s a huge extra cost just for the convenience of lower monthly payments.


Paying this additional interest feels like throwing money away. So drivers look for smart ways to pay off their loans faster and reduce the amount spent on interest. Switching to biweekly car payments is a simple strategy that can shave months or even years off an auto loan. By making payments every two weeks instead of monthly, drivers save thousands in interest and own their vehicle sooner.

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Benefit #1 – Pay Off Loan Faster

One of the biggest benefits of switching to biweekly car payments is that you’ll pay off your auto loan much faster. With a typical monthly payment schedule, you make 12 payments per year. However, biweekly means dividing your monthly payment in half and paying that amount every two weeks. So instead of 12 payments, you’ll make 26 half-payments each year.

Paying 26 biweekly payments per year equals the equivalent of making one extra monthly payment annually. By making installments more frequently, you end up paying down the principal faster and reducing the total interest paid over the life of the loan.

For a standard 84 month auto loan, switching to biweekly payments lets you pay off the loan in approximately 79 months – nearly 5 months faster. That means you’ll own the car outright 5 months sooner than with monthly payments. This accelerated payoff schedule is the biggest reason to consider biweekly payments.

 

Benefit #2 – Pay Less Interest

One of the biggest advantages of biweekly payments is that you’ll pay less interest over the life of your auto loan. By making payments every two weeks, you’re putting more money towards the principal balance each month. This means the interest has less time to accrue.

With a monthly payment schedule, a larger portion goes towards interest charges in the early years of the loan. But with biweekly payments, you’re making an extra month’s worth of payments each year. This allows you to pay down the principal faster.

For example, let’s say your monthly payment on an $20,000 auto loan is $300. By paying $150 every two weeks instead, you’d be making 26 half-payments annually, equal to 13 monthly payments of $300.

That extra $300 payment would go entirely to principal paydown. This reduces your balance sooner, saving you money as less interest accrues over time. Making biweekly payments puts your loan’s amortization schedule on the fast track.

 

Benefit #3 – Own Vehicle Sooner

By making biweekly payments, you’ll own your vehicle outright much faster than with monthly payments. Since you’re paying down the principal quicker, you build equity in your car at an accelerated rate.

With a monthly payment schedule, it takes the full loan term until you own the car free and clear. But biweekly payments let you get to 100% vehicle ownership ahead of schedule.

For a 6 year auto loan, switching from monthly to biweekly payments lets you own the car free and clear almost 1 year sooner. You’ll have full ownership after about 5 years instead of 6 years.

The faster equity growth is a great financial benefit. You’ll be able to tap into your vehicle’s equity for a loan or to trade it in much sooner than you would with monthly payments.

In addition, you aren’t “upside down” on your auto loan nearly as long. When your loan balance is higher than the car’s value, you have negative equity. Biweekly payments minimize this equity gap.

Owning your vehicle more quickly lets you avoid situations where your loan balance exceeds the car’s resale value. This puts you in a better financial position overall.

 

How Biweekly Payments Work

The concept behind biweekly payments is simple – you take your regular monthly car payment amount and divide it in half. You then pay this new biweekly amount every two weeks, instead of making one single monthly payment.

For example, if your monthly car payment is $500, your new biweekly payment would be $250. You’d pay $250 every two weeks (26 times per year), rather than $500 once per month (12 times per year).

By dividing your payment in half and paying more frequently, more of each payment goes towards reducing the principal balance. Less interest accumulates between payments compared to monthly installments. This acceleration in principal paydown lets you pay off the loan faster.

The key is making 26 biweekly payments per year rather than 12 monthly installments. Those extra payments directly attack the principal amount owed.

 

Real-World Example

To better understand how biweekly payments can save money, let’s look at a real-world auto loan example. Consider a new vehicle purchase price of $40,000, with an 84 month loan term at an interest rate of 9% APR. What would the monthly and biweekly payments look like, and how much total interest is paid over the life of this 7 year loan?

With a standard monthly repayment schedule, the monthly payment would be around $623. Over the 84 month term, you’d pay a total of $52,332 – with $12,332 of that going just towards interest charges. That’s a significant chunk of money spent on interest alone.

Now let’s see the difference with biweekly payments. You simply divide the $623 monthly payment in half to get your new biweekly amount. In this case, that’s $311.50 to be paid every 2 weeks. By making payments more frequently, you end up paying off the $40,000 loan in just 79 months instead of the full 84 months.

In total with biweekly payments, you’d pay $49,868 over the 79 month period. The total interest works out to $11,128 – meaning you save $1,204 in interest compared to the monthly payment scenario. Paying every 2 weeks puts over $1,000 back in your pocket.

For a major purchase like a vehicle, that’s an impressive interest savings just by modifying your payment schedule. The biweekly approach puts you 5 months ahead in paying off your auto loan.

 

Cost Savings Example

To demonstrate the potential savings, let’s look at the numbers for a real-world auto loan scenario. Consider a new $30,000 vehicle purchased with an 84 month loan at 6% APR. The monthly payment would be $429. By switching to biweekly payments of $214.50 instead, here is how the costs compare:

 

  • Monthly payments: 84 payments of $429 totals $36,036 over 7 years
  • Biweekly payments: 168 payments of $214.50 totals $36,036 over 6 years and 5 months

 

In this example, making biweekly payments allows paying off the 6 year loan 5 months faster than the monthly payment schedule. And by paying more frequently, over $1,000 less interest is paid overall.

The total interest paid with monthly payments is $6,036. But the total interest paid when going biweekly is only $5,036. That’s a savings of $1,000 in interest just by dividing the monthly amount in half and paying every two weeks.

The interest savings may be even greater for loans with higher balances, longer terms, or higher interest rates. But this demonstrates how biweekly payments can put extra money back in your pocket compared to conventional monthly payments.

 

Tips for Making Biweekly Payments

Switching to biweekly car payments is easy to set up but does require staying organized and on top of your finances. Here are some tips for making biweekly payments work smoothly:

 

Automate Your Payments

The best way to ensure you never miss a biweekly payment is to enroll in auto-pay through your lender. Most banks and auto financing companies allow you to set up recurring automatic transfers from your bank account every 14 days. You can schedule the amount for exactly half your monthly payment. Automating your biweekly payments ensures they happen on time without you needing to remember.

If your lender doesn’t offer automated biweekly payments, you can likely set it up through your own bank’s online banking platform. Simply schedule a recurring transfer to the auto loan account every other Friday or on whatever 14 day schedule works best for you.

Automating transfers makes sticking to a biweekly schedule effortless. You don’t have to manually make each payment or shuffle money around. The system does it for you reliably each period.

 

Additional Benefits of Biweekly Car Payments

Making biweekly auto loan payments instead of monthly payments has several other advantages beyond paying off your loan faster and reducing interest costs:

 

Improved Cash Flow

Many people find it easier to budget and manage smaller biweekly payments rather than one larger monthly payment. The more frequent schedule aligns with getting paid every two weeks for many borrowers. By timing payments to match up with your pay schedule, biweekly auto loans can improve cash flow.

 

Forced Savings

Sticking to a biweekly payment plan builds savings through discipline. Every two weeks, you need to have that amount ready to pay. This automated system makes sure you consistently set aside money instead of having to manually save up for the next monthly payment. The forced regular savings can provide a buffer against financial emergencies.

 

Faster Equity

When you own a vehicle, the equity is the current value minus what you still owe on the loan. By making biweekly payments, you build equity faster in your car since more principal gets paid off sooner. Having this equity available provides financial flexibility if you need it down the road.

 

Peace of Mind

There’s a psychological benefit to paying off debt faster. Knowing your auto loan will be paid off months sooner by switching to biweekly payments can provide peace of mind. You’re taking control of your finances and making faster progress towards owning your vehicle outright.

 

Drawbacks to Consider

While biweekly payments offer many advantages, there are a couple potential drawbacks to keep in mind:

 

Slightly More Effort: Making biweekly payments does require a bit more effort on your part. You’ll need to set up automated transfers or remember to make manual payments every two weeks. It’s easy to set calendar reminders, but does mean staying on top of your schedule.

 

Discipline Needed: There’s also the need for budgeting discipline. With money coming out of your account more frequently, you’ll have less wiggle room and need to plan spending carefully between paychecks. Variable income may make it tricky to always have funds available for biweekly payments.

 

So while the pros generally outweigh the cons, biweekly payments do demand commitment and proactive planning compared to monthly installments.

 

Who Biweekly Payments Work Best For

Biweekly payments are most beneficial for certain types of auto loans. Specifically, you’ll maximize savings with:

 

  • Longer Loan Terms: The longer the term of your auto loan, the more interest you pay overall. By shortening a 72, 84 or 96 month loan through biweekly payments, you’ll slash interest charges by paying down principal faster.
  • Higher Interest Rates: The higher your interest rate, the more you benefit from biweekly payments. Even shaving a few months off a 9% or 10% APR loan saves you more money than on a lower rate loan.

 

Drivers who qualify for special 0% APR promotions may not gain as much from biweekly payments. But for most auto loans, especially those with longer terms, it pays to switch to this accelerated method.

 

Alternatives to Biweekly

While switching to biweekly payments can help you pay off your auto loan faster and save on interest, it’s not the only option. Here are some other strategies to consider:

 

Paying an Extra Lump Sum

If you receive a tax refund, bonus, or other windfall, consider putting that money towards your principal auto loan balance. Even a one-time extra payment of a few hundred dollars can slash the total interest paid over the life of your loan.

The key is to specify that the extra amount should go to the principal. Otherwise, the lender may just advance your next payment due date.

 

Refinancing Your Auto Loan

If you qualify for a lower interest rate based on your current credit score and income, refinancing your auto loan can lower your monthly payments. Shop around online or at local banks and credit unions to see if you can get a better rate.

Refinancing resets the clock on your loan term, so be sure your new monthly payment fits your budget. But you can potentially save thousands over the life of the loan with a lower rate.

Crunching the numbers helps determine if refinancing makes sense for your situation.

 

The Bottom Line

Switching to biweekly payments for an 84 month car loan lets you pay less interest, own your vehicle faster, and puts money back into your pocket over the long run. Crunching the numbers shows why this simple strategy pays off.

The bottom line is that biweekly payments help you pay off your auto loan faster and save money on interest charges. By dividing your monthly payment in half and paying every two weeks, you end up making 26 payments per year rather than just 12. Those extra payments go straight to reducing your loan principal.

Over the life of a 6 or 7 year car loan, biweekly payments can shave months off the payoff date. You end up owning the vehicle outright much sooner than with monthly payments. Less time financing means less interest paid overall.

Running calculations with your specific loan amount, interest rate, and term will show exactly how much you can save. For most borrowers it ends up being hundreds or thousands of dollars in interest savings by choosing biweekly payments. The numbers don’t lie – it pays to pay more frequently.

Beyond financial benefits, there’s also the satisfaction of being debt-free sooner. You’ll have the title in hand quicker and can move on to saving or paying for your next vehicle. Given the choice, most drivers would rather not be locked into years of monthly car payments. Biweekly payments help accelerate the process.

If your goal is to pay the least interest and own your car faster, switching to a biweekly schedule is an easy and practical strategy. The savings will be well worth dividing payments in half and automating them to occur every two weeks.

 

Tips for Managing Payments

Making biweekly car payments takes a bit more effort than monthly payments, but a few simple tips can help you stay on track:

 

Set Up a Payment Calendar

Mark all your payment due dates on a calendar you check often. Seeing the biweekly deadlines visually can help prevent missed payments. Use a paper calendar, planner, or digital calendar to schedule the 26 payment dates over the course of the year.

 

Track Your Progress

Note each payment you make and watch your loan balance decrease faster than expected. Seeing the impact of biweekly payments can keep you motivated. Use a spreadsheet, online loan calculator, or app to monitor how much principal you pay down with each biweekly installment.

 

Automate Transfers

Set up automatic payments through your bank so the biweekly amount is withdrawn like clockwork. This takes the effort out of manually making each payment. You can also automate transfers from your checking account to a savings account earmarked for the biweekly payments.

 

Build Payment Cushions

Since biweekly payments come around more often, have a cushion in case of financial surprises. Try to keep a half month’s payment available as a buffer for if paydays or expenses don’t align perfectly.

 

Conclusion

In summary, switching to biweekly car payments instead of monthly payments allows drivers to pay off their auto loan faster and save a significant amount on interest charges. By dividing your monthly payment in half and paying every two weeks, you end up making the equivalent of an extra monthly payment each year. This accelerated payment schedule means you pay down the principal quicker, reducing the total interest paid over the loan term.

For Canadians with long 84 month auto loans, using biweekly payments is an easy and practical strategy to slash interest costs and become debt-free faster. Even modest savings of a few hundred dollars are well worth the simple effort of automating payments every two weeks instead of monthly.

Before enrolling, crunch the numbers and understand the potential interest savings for your specific auto loan amount and terms. Use an online calculator to compare monthly vs biweekly schedules. Then set up automatic transfers with your bank so payments are seamless.

Paying biweekly requires discipline to ensure funds are there every two weeks. But the long-term payoff makes it a smart financial move for your auto loan.

 

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Questions About 84 Month Terms

There would be 168 bi weekly payments in an 84 month (7 year) auto loan. With bi weekly payments, there are 26 payments made per year compared to 12 monthly payments. Over the course of an 84 month loan, that works out to 168 bi weekly payments (26 x 7 years = 168).

If you took out a $30,000 auto loan at 2.49% interest over 84 months (7 years), your bi weekly payment would be about $236. By dividing the monthly payment amount in half, your bi weekly payments allow you to pay the loan off faster and save on interest costs over the life of the loan.



By making bi weekly instead of monthly payments on your auto loan, you could potentially save hundreds or even thousands of dollars in interest charges over the life of your loan. Generally, you can estimate saving around 5-15% in total interest costs by accelerating your loan pay down faster with bi weekly payments. The exact interest savings depend on factors like the loan amount, interest rate and original loan term length.

Some of the main benefits of bi weekly auto loan payments in Canada include:

 

– Pay off your loan faster (about 5 months faster over a typical 6-7 year loan)

– Save money on interest charges over the loan

– Smaller bi weekly amounts may fit better with your budget/pay schedule

– Opportunity to pay down principal faster and build equity

– Disciplines you to pay loan on accelerated schedule

To calculate your bi weekly auto loan payment amount in Canada, start by determining your regular monthly payment amount on the loan (based on loan details like amount, interest rate and original term). Then, simply divide this monthly payment amount in half – that number will be close to your bi weekly payment. For example, if your monthly payment is $400, your bi weekly payment would be around $200.

Most Canadian lenders will allow you to structure bi weekly payments on auto loans with terms between 36 months (3 years) up to 96 months (8 years). The most common loan terms that bi weekly payments are used on are 6 or 7 year loans (72-84 months). The longer the original amortization, the more beneficial bi weekly payments can be to save significant money on interest.

You will pay less interest costs overall if you choose 84 bi weekly payments instead of 72 monthly payments. Even though the total loan term length is the same at 6 years, the increased payment frequency of bi weekly installments means more of your payment goes towards rapidly paying down the principal loan balance faster. This saves money on accumulating interest over time.



With bi weekly auto loan payments in Canada, lenders apply half of your normal monthly payment amount every two weeks. So you are making 26 half-payments over the year, equating to an extra month’s worth of payments compared to a monthly schedule. This extra money goes straight to reducing your principal auto loan balance faster.



Yes, most Canadian lenders allow you to set up automatic withdrawals from your bank account for bi weekly auto loan payments. This ensures your payments are made consistently every two weeks without having to manually do it yourself. Always check with your specific lender first about available automated payment options when you enroll in a bi weekly repayment schedule.

If you happen to miss a bi weekly payment on your Canadian auto loan, the same late payment fees and penalties would apply as missing your normal once per month installment. After a certain number of days past the due date, late fees are charged and the lender will also report payment delinquencies to the credit bureaus, impacting your score.

By making bi weekly payments instead of monthly payments, Canadian borrowers can pay off their auto loan around 5 months faster. For example, a standard 84 month (7 year) loan could potentially be paid off in full within 78-79 months if sticking to accelerated bi weekly installments. The exact payoff time depends on the original loan details.

 

Most Canadian lenders will allow borrowers flexibility to increase or lower their bi weekly payment amount if needed – provided proper notice is given. You may need to demonstrate financial hardship if reducing payments. And any increased payments would go directly towards paying your principal down faster. Always confirm directly with your lender first.



To enroll in bi weekly payments for your existing or new auto loan, speak directly with your Canadian lender to see if they offer this accelerated repayment option. There is often an enrollment form to complete specifying the bi weekly payment amount and withdraw dates. You may also grant permission for auto-withdrawal from your bank account.



Most Canadian lenders will allow you to make a full extra principal payment on your auto loan each year, over and above the bi weekly amounts – providing even faster savings. This lump sum payment would go directly against reducing your principal loan balance. Check with your lender first if you want to make additional monthly payments.



 

The easiest way to budget for bi weekly car loan payments is to have them automatically withdrawn from your bank account every two weeks. This ensures payments are made on time without manually having to do it. And with 26 pay periods per year, bi weekly installments line up perfectly if you get paid every 2 weeks as well from your job.

It is most advantageous to enroll in bi weekly payments right at the beginning of your auto loan term in Canada. This allows the increased payment frequency to have the maximum benefit and highest lifetime interest savings by rapidly paying down your principal balance faster in those critical early years.

 

With most Canadian lenders, you can enroll in bi weekly payments right from day one when you take out a new auto loan. Simply request to set up this accelerated repayment schedule upfront rather than standard monthly payments. Get your bi weekly auto loan amounts and auto-withdrawal dates established immediately.



Yes, most lenders will allow you to make round lump sum extra payments on a bi weekly auto loan if you want to pay it off faster – which can result in significant interest savings. These one-off payments allow you flexibility to rapidly reduce your principal balance when you have extra funds available to allocate. Check with your lender that they accept extra payments.

If faced with job loss or other financial hardship, borrowers could potentially negotiate with lenders to switch their bi weekly repayment schedule back to monthly installments – albeit at a higher interest cost over the loan’s amortization. This may require updating the terms and conditions of your loan agreement. Ask your lender about assistance programs if needed.

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