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8 Reasons to Use a HELOC

8 Reasons to Use a HELOC

Best uses of a HELOC

So just what is a HELOC? A home equity line of credit (HELOC) is a type of loan that enables you to open a line of credit using the equity in your home as collateral. It’s similar to a revolving line of credit. A HELOC enables you the freedom to draw on funds over a pre-determined term and up to your pre-approved limit. A home equity loan, on the other hand, enables you to borrow a lump sum and take it all at once and then pay it back over time at a fixed interest rate. A HELOC has an adjustable rate that changes with the market. It gives you the flexibility to borrow against your home’s equity, repay and then borrow again. It’s a smart move for homeowners looking to borrow smaller amounts over a longer period of time.

Many borrowers are still confused about the best uses of a HELOC and why it may be a better choice in some instances than a traditional home equity loan. To help you better understand, here are some examples of the best ways to use a home equity line of credit.

8 Ways to use a HELOC

  1. Home Renovation Projects – A HELOC is a great choice when you are doing a home renovation. Especially when the project will take time and require your spreading your payments out as work is completed. It’s also ideal if you’re doing multiple home renovation projects over time. A kitchen remodel, deck addition and a siding replacement for example. A HELOC enables you to draw on funds and pay out as you need to. Need ideas? Learn which home renovation projects give you the best return on investment in 2019.
  2. Home Decorating – Looking to freshen up your home with new furniture or new paint? Perhaps you want to completely redecorate your living room, convert an attic into an extra bedroom or purchase some artwork for your home. A HELOC is definitely the way to go when you’re decorating your home.
  3. Home Improvements & Home Repairs A HELOC is a great way to improve the energy efficiency of your home.  Draw on your line to purchase energy efficient windows, appliances or technology. A HELOC can help with property improvements as well.  Transform your property with some beautiful landscaping or other outdoor work.  These smaller-scale projects can increase the value of your home and can be completed with a HELOC. Remember, a HELOC enables you to use as little or as much as your total approved line over time. This allows you to complete multiple projects like those we’ve mentioned and others.
  4. Consolidate Debt – Speaking of multiple projects, you may have some lingering credit card debt plus a few home upgrades you’d like to complete. Because you use the funds as you need them, you can spread the money out and do different things. This can include paying down higher interest credit card debt in addition to completing a home improvement project or two.
  5. Take a Dream Vacation – Is it time for that vacation of a lifetime? Maybe you’re celebrating a special anniversary or it’s just time for that dream getaway. A HELOC can help you get where you’re going even if you haven’t been able to save enough for that special trip.
  6. Pay Educational Expenses – A HELOC can really come in handy when you have a child you are helping through college. It can help with other education-related costs as well. Maybe you’ve decided to go back to school yourself. Either way, it’s a convenient way to help with all of those college expenses that add up so quickly.
  7. Pay Off Medical Bills – You or a family member may have faced a serious illness or a medical emergency that caught you by surprise. You found the medical bills mounted quickly. Expensive medical treatment can really take a toll on a family budget. A HELOC can help you get out from under those stressful medical bills.
  8. Fund a Business Start-Up – Have dreams of starting your own business? A HELOC may be able to help you get a start or help keep you going through those tough beginning years. It’s definitely something to consider for your funding needs.

Important considerations when applying for a HELOC

 A HELOC isn’t your ticket to go crazy with large purchases or fancy vacations if you don’t have a plan to pay off the loan or if your income is not stable. You also have to keep into consideration that the interest rate will fluctuate, and you need to be prepared for that. You are using your home as collateral, so it’s imperative that you plan well and make your payments on time to avoid the risk of foreclosure. Do your homework when shopping for a HELOC.

Applying for a HELOC

When used wisely, a HELOC can be a great tool to help you fund various needs throughout life. It can enable you to tap into the value of your home and borrow money at a low-interest rate to accomplish some of your goals.


If you have decided that a HELOC is the right choice to help you meet your financial goals, we hope you will consider Choice One Community Credit Union as you are shopping for the best HELOC deal. We offer competitive rates and various terms to meet your needs. Most importantly, our members are our top priority!


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