February 11, 2019

10 things you can do with a HELOC

A home equity line of credit is a versatile financial product, which borrows from the equity of your home while allowing you to only pay back what you actually spend instead of the entire amount you qualify to borrow. This makes a HELOC an interesting choice for numerous financial needs and wants, where your only limitation to what it can be used for is your imagination.

While there are plenty more ideas, here are 10 things you can do with a HELOC:  

  1. In case of emergency: Let’s face it, life happens, and sometimes you need funds quickly to take care of an emergency. Consider utilizing a HELOC when emergencies arise in your life. Since you can borrow as much or as little – which is sometimes beneficial as a crisis has a tendency to flare up and fan down faster than a wildfire – you can control how much your borrow with every step you take to solve your problem.
  2. Renovate a home: Using a HELOC to renovate your home just goes together: You are borrowing from your largest financial asset to improve your largest financial investment. And, since home renovations have a high RIO, you’ll recoup most of the money you spent by increasing the overall value of your home. And, bonus, you’ll enjoy a nicer home after it’s done.
  3. Travel/vacations: Many HELOC programs work like a credit card, making them a safe, secure way to monitor your travel budget or go cashless while you are away on vacation.
  4. Educational expenses: College costs seem to creep up every year – even from one semester to the next. Using a HELOC can provide you with the relief you need in the monthly budget. And, unlike student loan debt, you won’t be worrying about your child being straddled with this loan years after they’ve graduated.
  5. Purchase a luxury car: Interest rates on most luxury car loans are often higher than most HELOC interest rates. Thus, it’s often a smart choice to borrow money in the form of a HELOC instead of borrowing money through a car dealership.
  6. Investment/starting a business: Start-up companies come with a lot of costs. While a lot are large, there are many more small financial costs to absorb in order to get things off the ground and running. Since many HELOC programs are organized so that you have a credit card-type card, you can use this card directly to make the many small purchases needed to open the doors and welcome in your adoring public. Better yet, unlike a traditional, large loan, you only pay back what you spend, allowing you to better budget your resources as you get started.
  7. Debt consolidation: Many people utilize a HELOC to consolidate several smaller debts into one, singular payment. The consolidation not only makes things easier financially, but you can often avoid a lot of unnecessary interest payments from each small debts’ own different, often high, interest rates.
  8. Down payment on a second home: Using a HELOC to assist in the down payment on a second home helps to save the liquidity you have that you would have otherwise had to use. And, since you are using your own money in the form of leveraging your own equity, mortgage lenders will look more favorably to you because it is similar in their minds to bringing a large amount of cash to the table.
  9. Special events (wedding): HELOCs are a natural fit to help pay for the special events in your life. Events like weddings can be expensive, but a HELOC can bring in a secondary cash flow option to lift the financial burden you don’t want or need when planning the big day or other special days in your life.
  10. Legal fees: Things like legal fees are hard to plan for because people don’t typically imagine scenarios where they will be in need of legal assistance. So, when they do, tapping into a HELOC and leveraging the equity already established in a home is often a way people can meet these unexpected financial issues. And, since (hopefully) this need is short-term, you can always stop utilizing the HELOC when it’s all behind you – not touching any more equity than you have to.


This article is for educational purposes only. Tulsa FCU makes no representations as to the accuracy, completeness, or specific suitability of any information presented. Information provided should not be relied on or interpreted as legal, tax or financial advice. Nor does the information directly relate to our products and/or services terms and conditions.