5 Smart Ways to Use a Home Equity Line of Credit

House with couple in front

One of the most practical reasons to use a HELOC is to consolidate debt. Oftentimes, the interest rate on a HELOC is much lower than the interest rates on your existing debts, especially high-APR credit cards. If that’s the case, using a HELOC to pay off those debts and streamline them into one payment can not only make your finances easier to manage, but also save you money.

When using a HELOC to consolidate debt, be sure you’re committed to paying down what you owe. To save money, you’ll need to refrain from racking up new debt on the credit cards or other open-ended loans you pay off.

Educational Expenses

If you’re sending a child to college or considering additional courses or degrees for yourself, you may want to use a HELOC to help cover the cost of tuition.

Because it’s a revolving line of credit, a HELOC can be a great fit for educational expenses that recur each semester as it prevents you from needing to take out new loans every semester or borrowing a lump sum upfront. Depending on your credit and the market, you may also find that interest rates on a HELOC are lower than private student loans, which can help you save money in the long run.

Medical Costs

If you’re facing a looming medical bill or are trying to catch up on unexpected medical costs, a HELOC can help. Because the loan is revolving, you can borrow what you need now and tap into this line of credit in the future if you’re faced with additional costs. Using your home’s equity in this way will help reduce the need to rely on other forms of high-interest debt, like payday loans or high-APR credit cards.

Emergency Expenses

In an ideal world, everyone would have emergency savings set aside for unexpected expenses. The reality, however, is that many Americans don’t have cash available if an unplanned need arises.

With a HELOC, you can access the money you need, when you need it. And there are no restrictions on how you use it. By opening a HELOC now, you can have it on hand if an emergency arises in the future.


Maybe you’ve got a travel opportunity you just can’t pass up. Or maybe you’re hoping to check off a bucket list trip before the kids head off to college. Either way, it’s not uncommon for folks to use a HELOC to finance a vacation they don’t have the cash on hand for.

While there are other options out there to finance vacations, HELOCs may offer lower interest rates, saving you money on interest payments in the long run.

Wedding Expenses

It’s no secret that weddings can be incredibly expensive. Whether you’re tying the knot yourself or helping a child do so, you may need additional cash to cover the associated costs.

Apply for a HELOC Today

HELOCs are a flexible and affordable way to cover a wide variety of costs. One benefit is that you make payments only on the amount you use. For example, you have a $100,000 line of credit, but only use $50,000. You will make payments only on that $50,000 of utilized credit. Also, there are no PSECU closing costs when you open a HELOC. You will pay only a notary fee.

Typically, a home equity line of credit will have a variable interest rate, meaning the rate can change at any time. But to give you more control over your finances, our HELOC Plus option offers fixed- and variable-rate advance options. This means that each time you advance funds from the line of credit, you can decide if those funds will be borrowed at a fixed interest rate (meaning the interest rate you pay will not change from the time you borrow the funds through the time you pay that amount back) or a variable interest rate (meaning the interest rate can go up or down based on the market from the time you borrow the funds through the time you pay them back).

Ready to put your home equity to work for you? Learn more about our HELOC Plus today.

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The content provided in this publication is for informational purposes only. Nothing stated is to be construed as financial or legal advice. Some products not offered by PSECU. PSECU does not endorse any third parties, including, but not limited to, referenced individuals, companies, organizations, products, blogs, or websites. PSECU does not warrant any advice provided by third parties. PSECU does not guarantee the accuracy or completeness of the information provided by third parties. PSECU recommends that you seek the advice of a qualified financial, tax, legal, or other professional if you have questions.