True, not all the months are 28 days long. But the “biweekly” thing isn’t exactly biweekly either. To banks, it means the same thing as “biweekly” does to the federal government- the 1st and the 15th. So that’s not the scheme that’s taking place here. The money comes from the fact that the juice isn’t running on the 1/2 payment for a full two weeks.
For the payment plans like this “biweekly” is biweekly, not semi-monthly. There isn’t enough juice on 15 days interest every month for the savings you get. One of the benefits that’s touted is that it “simplifies” payment - for people paid every week or every other week, it does. For those of us paid once or twice a month, it doesn’t.
**MadPansy64 ** – Thanks so much for the useful information and advice. Now that I know what to do, I’ll get this done with.
(It doesn’t help that I’ve been trying to deal with this through a flu-induced fog. Oy.)
For extra credit who can tell us how many days in the year the bank calculates!
[QUOTE=JustThinkin’]
Why is US Bank harassing me so much over so little?!
[/QUOTE]
Because they do not want you be mortgage # 44,456,563,498* to default on them.
*number is an estimate only. not to be confused with real data.
Um, unless our OP lives in his car, his loan isn’t really a mortgage.
[QUOTE=Hockey Monkey]
You do not want this late payment to go 30 days and get reported to the bureaus. Then you can deal with the third party company.
[/QUOTE]
There is also a great risk that a single payment that exceeds the thirty day limit may trigger the universal default clause, and every credit account you may have will cost you big bucks.
[QUOTE=JustThinkin’]
**MadPansy64 ** – Thanks so much for the useful information and advice. Now that I know what to do, I’ll get this done with.
(It doesn’t help that I’ve been trying to deal with this through a flu-induced fog. Oy.)
[/QUOTE]
You’re welcome.
Hope you feel better very soon.
[QUOTE=aktep]
You make the equivalent of 13 payments over the course of the year. It’s nothing you couldn’t do yourself - many banks will accept 2 1/2 payment checks each billing cycle (and twice they’ll get 3), and if they won’t you can always add 1/12 of the payment to your monthly check, or put aside 1/2 the payment every two weeks and then pay the bill when it’s due - 10 times you’ll have 2 halves set aside and twice you’ll have 3 halves set aside, so you’ll make an extra 1/2 payment twice a year. Depending on how interest is calculated, 26 1/2 payments may save you a bit more during the year than 12 13/12 payments or 10 full payments and 2 1.5 payments.
I get offered “deals” like this on my mortgage every couple of months. They usually want a few hundred dollars for the “convenience” of letting me pay this way.
[/QUOTE]
Right. You have gained nothing, and that 3rd party may have gone walkies with your cash. Maybe they went bankrupt or something.
You owe US Bank and you have not paid them. So pay them.
[QUOTE=Mongo Ponton]
For extra credit who can tell us how many days in the year the bank calculates!
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I thought I replied to this last night, but apparently I didn’t.
Most consumer loans these days are calculated actual, that is to say 365/365 (as though the year has 365 days). That said, most home purchase loans are calculated at 360/365.
Most commercial loans are calculated at 360/365 (as though the year has 360 days). This garners the bank a small extra amount of interest.
Actually, I say most, but I can only speak for most community banks located in the Northwest. I think though, that it’s pretty standard for consumer loans (other than mortgages) to be calculated at 365/365.