Bi-Weekly vs. Extra $500 a Month: Which Saves More?
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Two of the most recommended payoff strategies go head to head: bi-weekly payments against a flat $500 extra every month. Same $500,000 loan at 7%. One clear winner — with one caveat.
The numbers
- Bi-weekly: paid off in ~23.7 years, ~$172,300 interest saved. Annual extra outlay: one monthly payment (~$3,327).
- Extra $500/month: paid off in ~20.6 years, ~$252,500 interest saved. Annual extra outlay: $6,000.
Why $500 wins (and the caveat)
Extra $500 wins because it puts more money to work: $6,000 a year versus one extra payment of ~$3,327. Nearly double the extra principal, nearly double the savings. The caveat: bi-weekly's extra payment is painless — it syncs with biweekly paychecks and most people never feel it. The $500 requires deliberate budget room every month.
Can you combine them?
Yes — and it's powerful. Bi-weekly plus a monthly extra-principal amount stacks both effects. Just confirm with your servicer how each payment is credited and keep every extra dollar marked for principal.
See the full side-by-side on our comparison page — or see if you qualify for a payoff plan faster than either.
Calculations are illustrative only, based on the assumptions shown. Not financial advice, not a promise of savings or payoff time, and not a loan quote.
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