In NB, what should I know about bi-weekly vs monthly payments for car loans?

In New Brunswick, understanding the difference between bi-weekly and monthly car loan payments is crucial for optimizing your financing. A standard monthly payment involves 12 payments per year. Bi-weekly payments, on the other hand, involve 26 payments annually. The significant advantage comes with 'accelerated bi-weekly' payments, where your regular monthly payment is simply divided by two and paid every two weeks. This results in 26 half-payments, effectively equating to 13 full monthly payments over a year, rather than 12.

This accelerated approach directly impacts your loan's amortization. By making the equivalent of an extra monthly payment each year, you reduce your principal balance faster. This 'why it matters' translates into substantial interest savings over the loan's term, especially in the current 2025 market environment where interest rates are generally higher. Furthermore, it shortens the overall repayment period, getting you debt-free sooner. While the annual percentage rate (APR) remains constant regardless of payment frequency, the total interest accrued and paid will be less with accelerated bi-weekly payments due to the quicker principal reduction. This principle is consistent across Canada, including New Brunswick, and is a common strategy offered by lenders to help consumers manage their finances more effectively and align payments with typical bi-weekly pay cycles.