The Bi-Weekly Payment Method: A Complete Guide

What if you could make one extra payment per year on your debt without really feeling it? That’s exactly what the bi-weekly payment method does. It’s one of the simplest math hacks in personal finance, and it works on almost any type of debt.

What Is the Bi-Weekly Payment Method?

The bi-weekly payment method means paying half of your regular monthly payment every two weeks instead of making one full payment per month.

Here’s why it works: there are 52 weeks in a year, so paying every two weeks means you make 26 half-payments per year. That equals 13 full payments — one more than the 12 you’d make on a monthly schedule.

That extra payment goes entirely toward your principal balance, which reduces the total interest you pay and shortens your payoff timeline. You don’t have to find extra money in your budget — the calendar does the work for you.

How It Works: Step by Step

1. Take your monthly payment amount and divide it by two.
2. Pay that half-amount every two weeks instead of the full amount once per month.
3. Align payments with your paycheck if you’re paid bi-weekly — this makes it feel natural.
4. Check with your lender first. Not all lenders accept bi-weekly payments. Some require you to set it up through their system, and others may hold the half-payment until the second one arrives.
5. Make sure extra payments go to principal. Contact your lender to confirm that the extra payment reduces your balance, not just prepays future installments.
6. Stay consistent. The magic of this method depends on making all 26 payments every year.

Pros and Cons

Pros:

• Incredibly simple — no complex calculations or debt ordering
• Sneaks in one extra payment per year without adjusting your budget
• Works well if you’re paid bi-weekly
• Reduces total interest on any type of debt
• Can shave years off a mortgage and months off other loans
• Easy to set up and forget about

Cons:

• Not all lenders accept bi-weekly payments directly
• Some lenders charge a fee to set up bi-weekly payment programs
• The savings are modest on small, short-term debts
• Two months per year you’ll have three payment dates (which can feel tight)
• Doesn’t address which debt to prioritize if you have multiple debts

Who Is This Best For?

The bi-weekly method is a great fit if:

• You’re paid every two weeks and want your payments to match your paycheck cycle
• You want a low-effort strategy that doesn’t require tracking or budgeting changes
• You have a mortgage, car loan, or student loan with a long repayment term
• You’re looking for a way to pay off debt faster without major lifestyle changes
• You want to combine this with another strategy like snowball or avalanche for even faster results

Example

Let’s say you have a car loan:

Detail	Amount
Balance	$18,000
APR	6.5%
Monthly payment	$352
Original loan term	60 months (5 years)

With monthly payments: You pay $352 once a month for 60 months. Total interest paid: about $3,120.

With bi-weekly payments: You pay $176 every two weeks (that’s $352 ÷ 2). Over the course of a year, you make 26 payments of $176 = $4,576. Compare that to 12 monthly payments of $352 = $4,224. The difference is $352 — exactly one extra payment per year.

Approach	Payoff Time	Total Interest
Monthly ($352/mo)	60 months	~$3,120
Bi-weekly ($176/2 weeks)	~54 months	~$2,780

Your savings: About $340 in interest and you’re done roughly 6 months early. Not life-changing on a car loan, but it’s essentially free savings from a simple schedule change.

Where this method really shines is on larger, longer-term debts. On a $250,000 mortgage at 6.5% for 30 years, bi-weekly payments can save you over $50,000 in interest and shorten your mortgage by about 5 years.

FAQ

Do I need my lender’s permission to pay bi-weekly?

It depends on the lender. Some have formal bi-weekly programs you can enroll in. Others simply allow you to make extra payments whenever you want. A few hold your half-payment in a separate account until the second half arrives, which delays the interest-saving benefit. Call your lender and ask how they handle bi-weekly payments before you start.

Can I just make one extra payment per year instead?

Yes, and you’ll get a very similar result. Making one extra annual payment toward your principal is mathematically almost identical to the bi-weekly approach. The advantage of bi-weekly is that it spreads that extra payment across the year so you barely notice it. If you prefer lump sums, making an extra payment works just as well.

Does bi-weekly work on credit cards?

It can, but the benefit is smaller because credit card balances and payments change monthly. The bi-weekly method has the biggest impact on fixed loans with long terms — mortgages, car loans, and student loans. For credit cards, you’re better off using a strategy like snowball or avalanche that focuses on payoff order.

What about those bi-weekly payment companies that charge a fee?

Some third-party services offer to set up bi-weekly payments for you — for a fee of $300-$400. You don’t need them. You can set up bi-weekly payments yourself through your lender’s website or by manually scheduling transfers from your bank. Don’t pay someone to do what the calendar does for free.

Can I combine bi-weekly with other strategies?

Absolutely. Bi-weekly payments work as a baseline accelerator. You can stack them with the snowflake method (sending extra found money on top of your bi-weekly payments) or use bi-weekly payments within a debt stacking plan. The strategies aren’t mutually exclusive — they’re complementary.