it does....by doing it that way it knocks the principle down quicker and you pay less interest....all the loans I have outstanding are paid twice a month...in the long run it's cheaper.

 

The savings will also depend on the type of loan. If it is a fixed rate simple interest loan it will pay off much faster and save a ton of money in interest. If it is a variable rate compound interest loan it will still save you money just not as much money. Also some loans have a pre payment penalty that negates any benifit of paying it off early. These are all thing that you need to know before you sign the papers. All of this is why I allways pay a payment to myself and then when I have cash in hand I buy what I want, car or motorcycle.

 

Thanks...no prepayment penalty here. Just a standard simple interest loan like most people get on vehicles.

 

My wife and I have been trying to follow the dave ramsey philosophy. Making sure you have at least a thousand dollars in an emergency fund have made a big difference for us. The wiper motor went out on my car - $250- No big deal, I had the cash. Before I would have put it on a credit card. Once that cushion is in place - then I attack what ever loan/credit card has the smallest balance. So far this year alone, I have paid off 4 debts that had been monthly bills. Her truck will be paid off by summer and the bike paid off by fall.
I'm just trying to say "Yeah! Keep at it!"

 

Yep Ramsey for 20+ some yrs now.

The less business we give the banks the faster they will have to go find honest work.

 

+1 on Dave Ramsey! I'm 31 years old and been in the Army 13 years. The way I saw it, I have 7 more years to ensure I'm debt free. A few weeks ago a retired Sergeant Major gave me Dave Ramsey's Total Money Makeover as a farewell gift. It had taken me 9 years to save up about 30K. The problem was I had too many monthly payments on financed crap, "because I could afford the payment." Half way through the book I paid off my 2008 Street Glide, saving over $9K in interest. Then I paid off every other debt I have except my car. It left me with about $4K in the bank. I felt very vulnerable, but I am staying focused and will have my new 2010 Toyota Rav4 paid off in 6 months. I already feel like a weight has been lifted. I can now save and invest well over $100K before I retire in 7 years! I will never finance ANYTHING again! I was saving $500/month, now I can save just over $2000/month! Big difference!

 

The sooner you pay off any loan the more you save in interest.Most of the payment at first is all interest.