MBA Integrated Companies

Accelerated payoff of an amortized loan is based on paying off the principal in advance with supplemental monthly payments along with the regualr scheduled monthly payment. A popular way to do this regularly is the bi-weekly payment process. This process has been in existance since the 1980's. Knowing there are 52 weeks in a year, then paying bi-weekly would involve 26 payments each year. If there are 26 half payments, then would equal 13 full payments. The result will be one more full payment per year  compared to 12 full payments per year on the monthly plan. That extra payment goes directly toward the principal thus reducing the principal. Reduced principal saves interest and pays off the loan faster. Typically a 30 year amortized mortgage will be paid in approximately 20 years. However, if additional funds are added to the bi-weekly payments, then the mortgage will be paid off even faster.