- 1). Determine the principal. The amount of the loan is also referred to as the principal. If the bank has loaned you $30,000 to start a restaurant, the principal is $30,000.
- 2). Know the bimonthly payment amount. With bimonthly payments you pay half of your monthly payment on the first and the other half on the 15th of every month. Bimonthly payments are also referred to as semi-monthly payments.
- 3). Multiply the bimonthly payment amount by 24 pay periods. Note that while a biweekly (every two weeks) calendar year has 26 pay periods, a bimonthly calendar year has 24 pay periods. Divide the total into the principal. For example, an interest free-personal loan for $30,000 with bimonthly payments of $250 is calculated as follows:
$250 x 24 = $6,000 = yearly payments
$30,0000 / $6,000 = 5 years = term of loan - 4). Determine the interest rate of the loan, if applicable. If you have a fixed interest rate of 5 percent and your principal is $30,000, your total interest will be $1,500. Generally, your interest rate is added to your payment amount, increasing the term of the loan. For example, if your bimonthly payment is $250, calculate the term of your loan as follows:
$30,000 + $1,500 = $31,500 = amount to be repaid
$250 x 24 = $6,000 = yearly payments
$31,500 / $6,000 = 5.25 years = term of loan
Note that the lender may prefer to increase your bimonthly payment amount to keep the term of the loan within a certain period of time. - 5). Refer to the terms of your loan agreement when calculating the term of the loan, particularly if interest is included. If do not have a fixed interest rate, the total amount of interest owed can vary.
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