When interest is calculated, and how you can easily save interest

Weekly, monthly, or fortnightly repayments - paying extra, and when; how does it all work to save you interest on your loan?

Surprisingly simple and effective, paying more frequently saves a lot of interest because lenders often calculate the repayment by diving the monthly repayment by 2 for fortnightly, or 4 for weekly - but actually there's a 1/12 of a month extra in that so you end up making a whole extra months repayment in a year and this is fabulous to drive savings,

If you're paid monthly, it doesn't help to hold back money to make fortnightly or weekly repayments (because you've heard of the power of them) but instead you might consider using an offset to save interest during the month, and you could even increase your repayment by 1/12th to mimic our weekly or fortnightly repayments.

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Two Red Shoes Copyright © 2020 All rights reserved. Call on 02 9002 0380, 0404 494 929, email us  or 'old school' fax 02 9002 0381

Jarrett Group Pty Ltd atf Jarrett Group Discretionary Trust trading as Two Red Shoes hold Australian Credit Licence No: 428614 and are members of an external dispute resolution scheme. Details of our complaint resolution process can be found here or please see our credit guide. All information contained on this site is general information only, and does not take into account your particular financial situation or needs. You should consider your personal objectives, financial situation along with the recommendations of your trusted advisors.

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