HELOC Loan Strategies: How to Quickly & Efficiently Pay Down Your Balance

Guidelines are essential for any good financial vehicle. Without guidelines that inform you how to use your HELOC best, you’re left to figure it out on your own. And there’s a cost involved – a real cost of both time and money you could have gained from interest savings. Below, we’ve linked the most commonly used strategies for homeowners looking to use a HELOC as their operating account and take control of their equity. The same HELOC loan strategies work for primary residences and investment properties.

You’ve already learned that, in order to make any strategy work, the best option is to trade your standard, boring old checking account out for the HELOC account. They will operate in the exact same way … if you choose the right HELOC with the features you need. Refer to the ebook for which features are included with the best HELOCs. You need to make sure to choose one with automation that can assist you. Focusing on a particular HELOC simply because it has the best rate or lowest fees may sound right at first. But if it doesn’t have the automated features to help you execute your strategy, it’ll cost you time and interest savings in the long run.

Manual operation of a HELOC leads to human error – and time lost – every time. It simply isn’t as good for you as it could be.

The key principle in reducing your interest paid is simply this:

Your interest calculated is based on simple interest.

This means you only pay interest on the principal balance you owe.

heloc strategy

A HELOC’s interest is calculated on the average daily balance of the line of credit. The more you reduce the principal balance owed, the less interest you pay over time. To do this most effectively, have your income deposited in the account every single time. With each paycheck, you’ll see your principal balance reducing faster and faster. And your interest payment will shrink along with your principal balance.

So, only using the income you make today, how do you drive at your principal balance as efficiently as possible?


The best HELOCs allow for funds to be deposited direct to the account using the HELOC’s account and routing numbers. Today, you probably have your income deposited in your checking account the same way. And that’s exactly why we suggest that you replace your checking account with the HELOC. By doing so, you’re allowing your income to go from your employer directly to your principal balance.

And again, since your interest is calculated daily, this reduces your balance as much as possible – and therefore reduces the amount of interest being calculated each day.

Maybe you’re saying, “Sounds easy, but how do I pay my bills, get cash, and buy things I need if I don’t have a checking account or debit card?”

Easy. Read the HELOC loan strategies linked below to learn how you can maintain all those normal daily behaviors with a few slight adjustments. True, you might need to leave your comfort zone. But remember: what you’re doing right now isn’t getting you the result you want. To change or improve at anything in life, sometimes we have to step outside of our comfort zones to create a new normal. It might seem scary at first. You might feel a little uncertain. But after a short time, you realize it’s not so bad. Better, even. And it quickly becomes your new normal where you begin to thrive.

This is no different.

Now, click below to discover the best strategies you can use.