Everybody wants to pay off their loan sooner. The idea is that the more regular the repayments on your loan, the less you pay in interest. This is true, but how does it work?

The lender calculates your interest daily on the balance of your loan. The daily interest combined to make up your monthly interest charge on your loan, which determines your repayment for that month.

Paying regularly onto you loan, i.e., weekly, you are reducing the balance of your loan every week, rather than waiting till the end of the month to make a lump sum payment. This means your interest is reducing weekly inline with the reducing balance.

Furthermore, as there are 4.3 weeks on average in one month, you end up making 1 or 2 extra payments per year when paying weekly onto your loan than you would be paying monthly.

Here are a few things to consider before making weekly repayments on your loan