Debt Restructuring Calculator
See how easy it is to eliminate your debt faster by setting up biweekly payments.
Our biweekly calculator shows you more than just how to save money on your debt repayment. It can also help you develop a plan to get debt-free. You probably already know that paying minimum payments on credit card balances is a trap. The annual interest rates are so high (15 to 29 percent), and the payments are so low (2 to 5 percent), which means it can take decades to pay off balances in full.
Setting up a biweekly payment plan can help speed up how long it takes to pay off your debt. A simple and little-known way to achieve this is to start using a biweekly payment plan. This way you’ll get two extra payments each year, eliminating the debt faster.
How does a Biweekly Payment Schedule Work?
A biweekly schedule will save you time and interest fees. This calculator can help you to determine the best solution for your financial situation. Organizing your debts from highest to lowest interest rate and start working on paying down your debts quickly and efficiently.
Here’s how it works:
- A monthly payment schedule includes 12 payments
- On a biweekly payment schedule, the payment amount is about half of a monthly plan.
- On a biweekly payment schedule, you’ll actually make 26 payments in a year (52 weeks in the year, divided by 2).
- Although your payments are half of what you’d pay on a monthly schedule (12 payments), with a biweekly payment plan (26 payments), you’ll pay off more debt each year.
Faster debt repayment means you save money on interest fees. Since interest accrues monthly, restructuring with a biweekly payment plan means fewer interest charges are added to your bill.
Why use a biweekly payoff method?
Every year that you stick with a biweekly payment plan equates to one less month of interest being charged. That can mean huge savings with loans like mortgages and credit cards. In the case of a 4-year auto loan, that would mean you could pay off early in the third year of the loan. With a mortgage, a biweekly payment plan could save you thousands of dollars and be paid off years earlier.
Try this with your highest-interest debt if you want to reduce the total interest and payment amounts. We also have a loan calculator you can use to see if you can afford to take on any more debt. Take a minute and compare the costs of monthly payments versus biweekly. You’ll notice the principal balance will start to go down, and before long, you’ll be saving money on those interest charges.
This calculator was designed to help you decide whether moving to a biweekly schedule is a good option for you. If it is, call your lenders and ask if they’ll be willing to adjust your payment schedule. If you want to include multiple loans in a biweekly payment then you should look for a reputable debt restructuring organization to set that up for you.
Keep in mind that debt restructuring and debt consolidation are not the same things. Restructuring doesn’t save money for every payment or each year. In the long run, it might cost slightly more to eliminate your debt. Consolidation on the other hand will reduce your monthly payments and makes it easier to repay your debt while sticking to a budget. If you’d like to learn more, talk with a credit counsellor today by calling (800) 593-7305 or get started today with a Debt Analysis form online.