I'm paying off a student loan right now that accrues interest on a daily basis. Last month, for example, I got a bill where the principal was $25k and the interest was $150.
I pay about $500 each month, so when my payment is applied, the first $150 goes to interest and the other $350 knocks out some of the principal.
But it occurs to me that, since the interest accrues daily, I could make one payment of $125 every week. That payment would wipe out the interest I've accrued over that week and then reduce my principal a bit for next week's interest rate calculations. Since I'm steadily reducing the principal each week instead of letting my interest build up over a month, I might be able to save some money.
Do I end up saving on interest by doing this? Does it even work?