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Car Loan Glossary • amortization

Bi-weekly accelerated payments in Canada involve making a payment every two weeks, with each payment being exactly half of what your regular monthly payment would be. Given there are 52 weeks in a year, this results in 26 payments annually. This schedule effectively equates to making one extra full monthly payment over the course of a year compared to a standard 12-month payment plan. By contributing more frequently and an additional "monthly" payment annually, the principal balance of your auto loan is paid down significantly faster. This strategy not only shortens the amortization period but, more importantly for Canadian consumers, substantially reduces the total interest paid over the life of the loan. In the current and projected 2025 market, where interest rates may remain elevated, these interest savings can be considerable, making this a highly attractive option. Furthermore, it often aligns seamlessly with bi-weekly pay cycles, simplifying personal budgeting while accelerating debt repayment and building equity in your vehicle sooner. This widely available option from Canadian auto lenders is a strategic financial move to reduce overall borrowing costs and free up future cash flow.
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