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In NB, what should I know about accelerated payments for car loans?
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Car Loan Glossary • nb

In NB, what should I know about accelerated payments for car loans?

In New Brunswick, opting for accelerated payments on your car loan is a highly effective strategy to save money and pay off your vehicle sooner. This typically involves switching from a standard monthly payment schedule to a bi-weekly accelerated or weekly accelerated frequency. The mechanism is straightforward: your regular monthly payment is divided by two for bi-weekly (26 payments annually) or by four for weekly (52 payments annually). Because there are 26 bi-weekly periods and 52 weekly periods in a year, you effectively make one extra full monthly payment annually compared to a standard 12-month schedule.

This additional principal contribution significantly reduces the total interest paid over the life of the loan and shortens the amortization period, allowing you to become debt-free faster. In the current (2025) Canadian market, with potentially higher interest rates, these savings can be substantial, making accelerated payments a prudent financial move for NB consumers. While generally permitted across Canada with no specific provincial prohibitions in New Brunswick, it is crucial to confirm with your specific lender about their accelerated payment options and how they calculate the exact savings for your loan. This strategy empowers you to build equity faster and reduce your overall cost of borrowing.

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