@72jnse wrote:
The way I see this, is as long as you avoid paying every month, but instead aim for every 3 weeks.
You can in theory [ and hopefully in practice] be able to keep battling interest in a way that more and more progressively goes to principal.
Fun thinking about it. And mathematically if someone can afford it, another potential way to save money on interest.
Yes however the majority of savings is because of the extra amount you are paying
per year, from paying early.
$23,700 @ 15.86% with 540/mo = 67 months and 11,984 interest loss.
$23,700 @ 15.86% with 540/ every 2 weeks = 24 months & 3,968 interest loss
(540 every 2 weeks = 26*540 = 14,040 /year = 14040/12 = 1,170/month payment equivalent
$23,700 @ 15.86% with 1,170/mo = 24 months and 4,067 interest
Paying two weeks early every month would saved 99 over 2 years, but the extra pay would
save 4+years and almost $8000
It is the extra money you are paying making the savings.
With your plan of paying one week early.
$23,700 @ 15.86% with 540 every 3 weeks =40 months and 6,742 interest.
52 weeks / 3 weeks = 17.33 payments year
(540*17.333 payments)/12 = 780/mo equivalent
Once a month payment of 780 = 40 months and $6,803 interest
The one week interest gain of ~$60 over 3 years.
If you give exact balance, payment $, rate and frequency of payment, I will post or
private message a full amortization table.
Amortization for 3 weeks, 15 days, what ever plan you want.
