What Can You Use a HELOC For?

A home equity line of credit (HELOC) is a flexible borrowing option that allows you to tap into your home’s equity as needed. HELOCs are commonly used to pay for large expenses, consolidate debt, or cover unexpected costs.

Unlike a traditional loan that provides a lump sum, a HELOC is a reusable line of credit. That means you can borrow as much or as little as you need (up to your approved credit limit) at any given time, only paying interest on the amount you use. In this way, they work similarly to a credit card. However, at Bank Midwest, there is no annual fee for a HELOC if automatic payments are initiated from your Bank Midwest bank account.

What can I use a HELOC for?

HELOCs are known for their flexibility and are best used for long-term expenses. Below are the most common ways they are used:

Renovations

Want to update your kitchen, add a deck, or replace an aging roof? A HELOC gives you access to funds when you need them, so you can complete renovations at your own pace. Plus, home improvements can increase your home’s value, making it a smart investment.

Consolidate debt

If you’re managing multiple high-interest debts, a HELOC can help you simplify your finances. By using your HELOC to pay off credit cards or personal loans, you can reduce your interest rate and lower your monthly payments.

Education

Tuition, textbooks, and other education expenses can add. Up quickly. A HELOC can provide a flexible financing solution for college costs, professional certifications, or even continuing education for career growth.

Retirement

A HELOC can be used in retirement as a financial cushion or to fund other income-generating expenses, like purchasing a home to rent out. A HELOC can also be valuable when unexpected expenses come up when you’re on a fixed income.

Major Purchases

Whether it’s a a once-in-a-lifetime trip, medical bills, or a new vehicle, a HELOC provides a cost-effective way to finance larger purchases. Since you can borrow only what you need, you can manage your spending more effectively.

Is a HELOC right for you?

A HELOC is a great option if you’re looking for flexibility and lower interest rates compared to other borrowing methods. Plus, with Bank Midwest’s no annual fee when you enroll in automatic payments, you can access funds with minimal cost.

If you’re interested in learning more about how a HELOC can work for you, reach out to your local banking center or fill out this form on our website.