Loans Paid Twice a Year

A bi-annual (semi-annual) payment loan requires two payments per year instead of twelve. Each payment covers half a year of interest plus principal, and the per-period rate is the annual rate divided by two. The trade-off versus a monthly loan is simple: fewer, larger payments. Semi-annual schedules suit borrowers whose income arrives in large installments, and lenders use them for some agriculture, equipment, and business loans. Because interest is paid down less frequently within the year, a semi-annual loan costs slightly more interest than an otherwise identical monthly loan — this calculator shows the exact totals.