Weekly vs Monthly Interest Payments Explained

[val1239]

Hello

I currently have one loan with Westpac. Paying interest only. I am repaying the loan on a Monthly basis.

I realize that if I was to pay weekly, my total interest repayment would be smaller as I won't be paying interest on interest.

I called Westpac today and they said that I cannot setup a direct deposit on a weekly basis unless I had a P & I loan.

What is a way around this?

 

[Peter_Tersteeg]

No way around this. As far as I'm aware, all lenders charge interest only loans on a monthly basis. Weekly or fortnightly repayments are not available.

If you're worried about paying interest on interest (which is a negligible amount), set up an offset account against the loan. The negates the effect more than weekly repayments does.