The Benefits Of Bi Weekly Loans

The Benefits Of Bi-weekly Loans
If you​ are trying to​ find ways to​ pay off your mortgage loan more quickly,​ then one possible solution is​ to​ use the​ bi-weekly payment method .​
Instead of​ paying off your mortgage loan payment every month,​ you​ pay half the​ monthly amount every two weeks .​
This can help you​ to​ drastically reduce the​ length of​ your loan,​ and thereby save you​ a​ lot of​ money .​
If you​ are new to​ bi-weekly loans,​ then here are some tips to​ get you​ started.
Paying off every two weeks
Many people forget the​ fact that there are 4.3 weeks in​ a​ month,​ and so by paying off half your monthly amount every two weeks you​ will save money .​
It means that over the​ space of​ one year you​ will make the​ entire year’s payments a​ month earlier .​
So,​ every year you​ will pay off an​ entire month’s payment from the​ principal loan amount .​
Although this may not seem a​ lot,​ it​ will in​ fact reduce your loan term significantly and could save you​ thousands of​ pounds.
Bi-weekly companies
Some companies specialise in​ offering bi-weekly loans,​ on​ the​ basis that it​ will save you​ a​ lot of​ money .​
In return,​ you​ pay them a​ minimal service charge each month for the​ privilege .​
Although this can still save you​ money,​ there is​ no reason why you​ should have to​ use one of​ these companies .​
Most normal mortgage loan providers will cater for bi-weekly payments,​ but they won’t charge you​ for the​ privilege .​
Further,​ if​ you​ pay a​ monthly service charge over a​ long period,​ you​ may end up spending as​ much on​ the​ charges as​ you​ would save .​
The easiest way to​ take advantage of​ the​ bi-weekly loans is​ to​ set up the​ system yourself .​
Most mortgage lenders will allow you​ to​ make prepayment on​ your loan,​ so instead of​ waiting for the​ monthly payment,​ just make sure you​ pay half the​ amount every two weeks .​
If your lender will not accept prepayment,​ then simply pay a​ little more each month .​
Pay 13/12 of​ your monthly payment each month,​ as​ this will have the​ same effect as​ paying every two weeks.
Can you​ afford it?
Obviously,​ the​ reason why many people don’t consider this method is​ because they believe they cannot afford it .​
With mortgages taking up a​ huge chunk of​ your salary already,​ to​ pay more might seem impossible .​
However,​ you​ are paying only a​ tiny amount more each month,​ and in​ return you​ can save yourself thousands in​ the​ long-term .​
If you​ can afford it​ then it​ is​ definitely worth considering.
Other ways to​ save
Although it​ is​ a​ great way to​ save money,​ there are other ways to​ use the​ money .​
If you​ have a​ very low mortgage rate,​ then it​ might be more sensible to​ keep paying at​ the​ current rate and use the​ extra money to​ invest in​ a​ high yield fund .​
However,​ if​ you​ have a​ higher loan rate and want to​ get out of​ debt more quickly,​ bi-weekly payments can really help you​ to​ do this.

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