I get the appeal of bi-weekly payments, but honestly, I've found them a bit overrated. Tried it myself for a while, and yeah, it felt good seeing the balance drop more often, but the actual interest savings weren't as impressive as I'd hoped. Instead, I switched to just making one extra full payment each year—usually around tax refund time. Less hassle, same (or better) results, and I don't have to stress about timing or lender quirks. Just my two cents...
"Instead, I switched to just making one extra full payment each year—usually around tax refund time."
Interesting approach—I’ve been considering something similar myself. Have you noticed if timing that extra payment differently (like mid-year vs. tax season) makes much of a difference overall? Curious if anyone's experimented with that...
tax season) makes much of a difference overall?
I've wondered about timing too. Like, does it really matter when you toss in that extra payment, or is it just psychological? I mean, interest compounds daily on most loans, right? So logically, wouldn't paying earlier in the year save you a bit more over time compared to waiting until tax season? Or is the difference so small it's not even noticeable...? Curious if anyone's actually crunched the numbers on this.
I've wondered about this too, honestly. I mean, logically speaking, yeah, paying earlier should technically save you a tiny bit since interest does compound daily. But realistically, unless you're throwing in a huge chunk of cash, the difference probably amounts to pocket change over the life of the loan. Has anyone here actually tested this out with real numbers? I'd be curious to see if it's worth stressing over timing or if we're just splitting hairs...
I've actually played around with this quite a bit on my own loans—mostly mortgages, but the principle holds true for most types of debt. You're right that mathematically speaking, paying earlier in the month or making extra payments does shave off interest over the long run. But honestly, the actual dollar difference is usually pretty minimal unless you're consistently putting in substantial extra amounts.
A while back, I got curious enough to run some numbers on a standard 30-year mortgage I had. I used an amortization calculator and tested different scenarios: paying exactly on the due date, paying early each month, and throwing in extra payments here and there. Turns out, paying early each month made such a minor difference it was hardly noticeable—I'm talking just a few hundred dollars saved over the entire life of a six-figure loan. Sure, technically that's money saved, but spread over decades? It felt more symbolic than impactful.
On the other hand, making additional principal payments—even small ones—had a significantly bigger effect. Paying an extra $100 or $200 every month actually chopped off years from the loan and saved me thousands in interest overall. So if you're feeling stuck paying mostly interest and want to see real progress, I'd suggest focusing more on extra principal payments rather than stressing about timing.
Of course, everyone's loan terms and situations are different, so your mileage may vary. But from my experience, timing alone isn't worth losing sleep over. If you're looking to make meaningful progress, consistently adding even modest extra payments toward principal makes a bigger dent than worrying about paying a few days early.
Just my two cents...or maybe a few hundred bucks saved over 30 years!
