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

In order to pay off your home equity line of credit, you need a plan. And, in most cases, the best strategy will work for either a primary residence or investment property. Executed well, HELOC strategies can make your life easier. And, the best strategy will help you pay down your line of credit quickly and efficiently.

But, what’s at stake? The simple fact is that you stand to lose a lot without a proper strategy. Time, money, flexibility … going into a HELOC without a plan puts them all at risk.

However, we’ve heard from many homeowners who have found success using the methods we’re about to outline.

The Two Most Effective HELOC Strategies

Before we even mention any particular strategy, there’s one thing you need to remember. And that is this: always use the HELOC in place of your checking account. Once you read the strategies, you’ll understand why.

1. The Credit Card Strategy

Simple, easy to understand, and the most effective strategy. Here’s how it works:

  • Direct-deposit your income into the HELOC account
  • Pay for all monthly expenses using one credit card (best if you get good rewards with that card)
  • Pay off the credit card in full at the end of the month using the HELOC
  • Rinse and repeat until the HELOC balance is paid down to zero

Click here for details about this HELOC strategy

heloc strategies

2. The Operating Account Strategy

This one cuts the credit card out of the picture, but it’s (very slightly) less effective at reducing your interest payments. Here’s how it works:

  • Direct-deposit your income into the HELOC account
  • Pay for all monthly expenses using the line of credit itself
  • Do it again until your balance is gone

Click here for details about this HELOC strategy

Remember one thing. This only works if you have positive cash flow each month. If you spend close to or more than your income monthly, you’re not a good candidate to pay off a HELOC quickly.

For complete information about these methods – and to learn what makes them so effective – visit our HELOC Strategies resource page. Or, click either of the two links below to dig into the one that interests you most.