Why Paying Off Your HELOC Faster Matters
A Home Equity Line of Credit (HELOC) can be a convenient way to access cash for home renovations, debt consolidation, or emergencies. But here’s the catch: since most HELOCs have variable interest rates, your payments can rise over time, making it harder to budget.
The longer you carry a balance, the more interest you’ll pay—and the more financial stress you’ll face. The good news? With smart strategies, you can pay off your HELOC faster and save thousands in interest.
👉 Before starting, run your numbers with our HELOC Payment Calculator to see how extra payments affect your balance.
10 Proven Strategies to Pay Off a HELOC Faster
1. Make Extra Payments Toward Principal
Most HELOCs only require interest-only payments during the draw period. But if you add extra money toward the principal, you’ll cut your balance faster and reduce future interest.
Example: Paying just $200 extra per month on a $50,000 HELOC at 8% could save you over $12,000 in interest over time.
2. Switch to Bi-Weekly Payments
Instead of paying once a month, split your payment in half and pay every two weeks. This results in 26 half-payments (13 full payments) per year, shaving years off your repayment.
3. Refinance to a Fixed-Rate Home Equity Loan
If interest rates are rising, consider refinancing your HELOC into a fixed-rate home equity loan. You’ll gain predictable payments and avoid future rate hikes.
4. Use Windfalls Wisely
Tax refunds, work bonuses, or inheritance money can make a huge dent in your HELOC balance. Even one lump sum payment can cut years off repayment.
5. Apply the Debt Snowball or Avalanche Method
- Debt Snowball: Pay off the smallest debts first for quick wins.
- Debt Avalanche: Pay off the highest-interest debt first for maximum savings.
If your HELOC has a lower rate than your credit cards, pay down credit cards first—then attack the HELOC.
6. Budget and Cut Expenses
Redirect savings from cutting subscriptions, dining out less, or reducing non-essential spending straight into extra HELOC payments.
Pro Tip: Even $100/month extra can make a massive difference.
7. Avoid Borrowing More
It’s tempting to dip back into your HELOC once you’ve paid some off. Resist! Treat it like a loan, not a credit card.
8. Consider a Cash-Out Refinance
If your mortgage rate is still competitive, a cash-out refinance can consolidate your HELOC into your primary mortgage. This often gives you a lower blended rate.
9. Rent Out a Room or Property
If you have unused space, consider short-term rentals. Even $500/month extra income could wipe out your HELOC balance years early.
10. Automate Payments
Set up automatic payments for more than the minimum. Automation ensures consistency and helps you avoid late fees.
Case Study: Paying Off a HELOC Faster
- Loan Amount: $40,000
- Rate: 8%
- Standard Repayment: $387/month → 15 years → ~$29,660 in interest
- With $200 Extra Each Month: Loan paid off in ~9 years → ~$14,200 in interest saved
👉 That’s a savings of $15,000+ just by paying a little extra each month!
FAQs: Paying Off a HELOC Faster
Q1. Can I pay off my HELOC early without penalties?
Yes, most HELOCs allow early payoff with no prepayment penalties. Always check your lender’s terms.
Q2. Should I prioritize my HELOC or credit cards?
If your credit card APR is higher, tackle that first. Then focus on paying off your HELOC.
Q3. Is refinancing always the best way to pay off a HELOC?
Not always—if rates are high, refinancing could cost more. Compare scenarios with a calculator first.
Q4. Does making bi-weekly payments really help?
Yes! It adds one extra full payment per year, which can shorten your repayment by years.
Q5. How do I calculate the savings of extra payments?
Use a HELOC Payment Calculator to simulate how much faster you’ll pay off the balance.
Final Thoughts: Take Control of Your HELOC
Paying off your HELOC faster isn’t just about saving money—it’s about gaining peace of mind and financial freedom. With simple strategies like making extra payments, budgeting smarter, or refinancing wisely, you can eliminate debt years ahead of schedule.
👉 Next Step: Run your own numbers with our HELOC Payment Calculator and choose a repayment strategy that works best for you.
The sooner you start, the sooner you’ll be debt-free.