Smart Payment Plan Explains Benefits of Payday Match Plans on All Your Debt

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“No one likes to pay bills,” says a representative from Smart Payment Plan. “The process is that much worse when you’re not sure where all the money is going to come from.”
Smart Payment Plan is a financial technology company that is dedicated to automated consumer bill payments, which simplify budgeting, improve cash flow, and aid in paying off debt faster by matching smaller bill payments to customers’ paydays, depending on their pay schedule.
When consumers are operating on a tight budget, it becomes difficult to allot a certain amount of money towards all of their bills, particularly higher cost loans such as mortgages, auto loans, credit cards, and student loans. According to the experts at Smart Payment Plan, there are some helpful strategies to utilize when you’re on a tight budget and trying to figure out your finances.
Once such strategy is the use of micropayments, or payday match payment plans. This strategy can be used for credit card debt, vehicle payments, mortgages and more. With most loans, you are only required to make a single payment per month, but if you are able to strike a deal with your lender, the company might allow you to make biweekly payments.
The concept behind biweekly payments is simple, and making payments on this schedule will drastically reduce the amount that you pay in interest. The premise is that you submit half of your loan payment to your lender every two weeks. While there are only 12 months per year, there are 26 two-week periods. This means you are essentially making 13 monthly payments per year, one more than normal. That extra payment goes toward the principal of the loan. Since the loanee is reducing the amount of the loan balance quicker, they are also reducing the amount of interest charged over the life of the loan.
As the Smart Payment Plan professionals explain, if you manage to continue with this schedule for the duration of a five-year auto loan, for example, you will shorten your loan by five months. With regard to a mortgage, BankRate estimates that it reduces the term of a 30-year loan to about 25 years.
That is how much sooner you will own the car or home outright, which leads on to another benefit. With regard to a mortgage or auto loan, by reducing the lump sum of the principal loan amount, you similarly increase the amount of equity in your car or home. In other words, you own more of your car or home after three years than you would through making monthly payments. Vested equity, particularly in relation to home ownership, makes people feel more confident and is a real asset that can be put to use in a number of ways.
As the most of a regular minimum payment due balance on a loan is funneled toward interest payments, this method can lead to staggering savings on the interest rates that you are paying, over the term of a loan. According to, this method can save homeowners tens of thousands of dollars, with a savings of 23 percent to 30 percent in total interest costs.
One issue that is more pertinent with credit cards is that credit card companies typically charge interest on a daily basis. The team at Smart Payment Plan says that lowering your balance sooner rather than later, with biweekly payments, means that over time you pay less interest. Credit card expert Gerri Detweiler, co-author of Slash Your Debt: Save Money and Secure Your Future, agrees.
“The sooner your payment gets there, the sooner your average daily balance goes down and the less interest you will pay,” Detweiler explains.
According to Smart Payment Plan, another potential benefit of making biweekly payments is the potential to improve your credit card score. Credit card issuers and other lenders generally report your outstanding balance to the credit bureaus on a monthly basis. Even if you pay your monthly balance in a timely fashion on the 15th of the month and your lender submits their information reports on the 1st, you may be shown as carrying a higher balance at the moment the issuer reports. Biweekly payments cut the odds that you will have a big balance showing when the issuer takes your “credit snapshot.”
Biweekly payments are a relatively painless way to reduce the cost of borrowing and pay off your loans faster. As the experts at Smart Payment Plan explain, if you are paid on a biweekly basis, the payment feels the same on your wallet because you are taking half of a payment from each paycheck.