How Do you Pay Back a Home Equity Line of Credit?
How Do you Pay Back a Home Equity Line of Credit?
During this period, which is usually 10-15 years, you can make payments back to the principal amount as well. Once you pay off a portion of the principal, these funds return to your line of credit amount.
Once the draw period is up, you get into the one where you start repaying the principal balance on your line of credit, plus interest.
How to Pay Off a HELOC Sooner
It all starts with evaluating the budget to know how much money can be allotted toward repayment. Are you really concerned about the interest that you will end up paying over the life of this kind of loan? See if you have enough in your kitty to make further principal payments. In the case of a home equity line, making these additional payments would reduce the time it will take to pay back the loan. For a home equity line of credit, additional principal payments will make your monthly payments drop as well, but for that, you will need to notify your lending company that the additional payments should be made applicable to the principal.
