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Car Loan Glossary • amortization

Bi-weekly accelerated payment in Canadian auto finance is a strategic payment option where you make a payment every two weeks, resulting in 26 payments over the course of a year. Unlike a standard monthly payment (12 payments) or even a regular bi-weekly payment (which typically divides your monthly payment into two, resulting in 24 payments annually), the accelerated method effectively adds one extra monthly payment towards your principal each year. This is because your regular monthly payment amount is divided by two, and you make that half-payment 26 times instead of 24.

Why this matters significantly to Canadian consumers: this approach leads to substantial interest savings over the life of the loan. By reducing the principal balance more frequently and with an extra 'monthly' contribution annually, less interest accrues, thereby lowering the total cost of borrowing. It also dramatically shortens the amortization period, allowing you to pay off your vehicle loan faster and build equity more quickly. This popular option is widely offered by lenders across Canada and is particularly advantageous in the current and projected 2025 market conditions, where optimizing debt repayment and minimizing overall vehicle costs are key financial goals for many.
Related Topics: amortization payments

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