If I make a payment on my car loan every two weeks do I save money on interest and pay if off faster?

I am trying to find out if I make a payment every two weeks on my car do I pay off the car faster and save on interest instead of paying it once a month... and how do I determine how much I am saving (if any).....ex. If my car payment is 400 a month due on the 15 th -- instead of paying it once a month if I pay 200 on the last day of the month and 200 on the 15th.......

Public Comments

1. if you had to ask a question like this i'm scared for you and your child if you are a new mommy what a stupid question
2. Sure, you save a little bit. Not much, but every bit helps. To do the calculation, suppose there are 31 days in the month, you pay on the 15th (16 days early) and you interest rate is 8%. The calculation is (days early) / (days in year) * interest rate * dollars paid early. So, you saved 16/365 * .08 *200 = 70 cents (per month). As you can see this won't make you rich anytime soon, but every bit helps.
3. I think it really depends on your specific auto loan. For example, some loans charge a penalty if you pay it off early (thus avoiding some interest fees), but the auto loan I have has no early payment penalties, because the interest was already accounted for when we signed our paperwork. You should probably peruse your paperwork or contact your loan company/car seller to find out what type of loan you're in.
4. Yeah u will save on interest...the faster its paid the more u will save! if u pay the loan back in double the time that was originally agreed u should pay half the interest as the longer u have a loan out the more interest it will gain...thats how banks make their money!!
5. I think it depends on the loan. Some of them have penalties for paying off early. But the penalty I would imagine is less than the overall interest. If I were you, I would call the loan company and ask about your specify loan.
6. There exists a common fallacy among "financial advisors" that paying your mortage or any APR structured debt every 2 weeks affords a big savings over time. Someshat true. But it's more effective to jsut make one extra monthly payment (designate you want it applid to prinipal only) each year. For exact calculation and how to pay x to save x go to michaelbluejay.com/house/payoffearly. Also, good info at wsj.com, kiplinger.com, and mtgprofessor. Principles can be applied to car loans. Don't forget, a car is a sharply depreciating asset (barely qualifies as an asset really). People would be wise to buy the sweet spot 3-4 year old car at half the price of the new one and finance as little as possible. IF financing, shop around for rates and termsavoid dealer finance co., usually. The "PF Model" is the best car=Paid For.
7. Auto loans used to be set up using the "Rule of 78ths", but it's rarely used any more. Most loans are simple interest loans and on a simple interest loan whether it be mortgage, auto, school, whatever ... ask 2 things - 1) Is there a pre-payment penalty? 2) is interest calculated by simple interest or by the rule of 78ths? If there is no prepayment penalty & you're set up on simple interest, you'll save a bunch. Use the calculations suggested earlier. I'm sorry about the rude comments from earlier posts. They obviously need to do a little homework before anwering so quickly. Good luck. If your interested, the rule of 78ths was developed to make sure that lenders actually made some money. Long ago, people paid cash for most everything and lenders had a hard time making money. Hard to believe, I know.
8. If you have an open end loan, you can pay it down anytime. If you're a home owner, it would be better to apply the extra $ towards the mortgage if that's an open end.
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