When you take out any kind of loan today, you might find that you are on a monthly payment plan. Most lenders want you to commit to one agreed payment rate per month from the first month until the last. However, while that might be a great benefit for some, it can often be hard to find that lump sum of money.
Another option that many are choosing today is to go with a bi-weekly payment. This means you make smaller payments twice per month, which can be easier to find. How do you get this started?
Contact your lender of choice
If you have a loan already, you could get in touch with the lender after you have made a few payments. Very few lenders would reject the ability to get two smaller payments over one larger payment. You are less likely to miss two smaller payments, so this is not something that many lenders will reject. This makes it easier for you to get an agreement in place that suits your lender.
Arrange the dates of payment
Now, you would need to work with the lender to come up with an agreed date of payment. Most choose something like the first day of the month and a day in the middle. Your lender will typically have suggestions or requirements as to what dates of payment they will choose to accept from you. Find an agreement that suits both parties involved.
Work out your new payment rate
For the most part, your payment rate can simply be halved. If you were paying $100 per month, you might now make two payments of $50. This is very important as it can make sure that you can get a payment rate that works for you. Keep in mind, though, that if you pay any administration fees with each payment you might now be paying these twice.
Make your payments on time
With this new agreement, you will likely be given slightly less leeway to make your payments late. It often comes with heavier penalties, so make sure you can always pay on time consistently.
Looking for other ways to pay off your auto loan? Then be sure to check out RateGenius.com for more ideas and tips on doing just that.
