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Home Equity HELOCs

How Do HELOCs Utilize Blockchain?

A blockchain is a digital ledger—a database that can store records, prove ownership, and share information. Unlike other databases, a blockchain is decentralized, meaning no one person controls it. This makes it a safer, more trustworthy option to record transactions.

Many financial companies, including certain HELOC lenders, combine blockchain technology with artificial intelligence (AI) to create more efficient application, underwriting, and funding processes that benefit the lender and the borrower. 

What is blockchain?

Blockchain technology records transactions across multiple computers in such a way that no one can retroactively alter the registered transactions. This technology is the backbone of cryptocurrencies, but its utility extends far beyond digital currencies.

A blockchain is a chain of blocks, where each block contains a number of transactions. Every time a new transaction occurs on the blockchain, a record of that transaction is added to every participant’s ledger. It does not rely on a central authority or intermediary to validate transactions but uses a consensus mechanism among a network of users to agree on transaction validity. This approach enhances transparency, security, and integrity of data.

Blockchain technology supports smart contracts—self-executing contracts with the terms of the agreement written into lines of code that run on the blockchain and execute transactions when predetermined conditions are met, without the need for intermediaries. This feature has significant implications for automating and streamlining complex processes, such as those involved in HELOC lending.

How does blockchain benefit HELOC borrowers?

Blockchain can revolutionize how lenders and borrowers interact by offering a more transparent, efficient, and secure platform for processing loans, verifying collateral, and managing repayments. The integration of blockchain in the HELOC lending process can reduce fraud, speed up transaction times, and lower the costs associated with loan processing and administration.

By leveraging the inherent benefits of blockchain technology, HELOC lenders are poised to transform the lending landscape, offering enhanced security, efficiency, and transparency to homeowners looking to tap into their home equity.

What is a blockchain HELOC?

A blockchain HELOC is a home equity line of credit that uses blockchain technology to store and transmit records of transactions, verify paperwork, exchange data, and more. 

These types of HELOCs can benefit borrowers in several ways. 

More affordable

Blockchain can make loans more affordable. According to HELOC lender Figure, using blockchain to power the lending process brings origination costs down from thousands of dollars to just hundreds. 

Faster funding

Blockchain also streamlines much of the underwriting process, allowing for faster funding. Synergy One Lending, for example, uses blockchain to speed its funding time up to just five days. Using traditional manual processes, you can expect HELOC funding to take 45 days or more.

Easier and more secure

Blockchain can also make lending more secure because it’s encrypted and can’t be altered. It enables a fully online process, meaning an easier and hassle-free experience—no matter where you’re located.

How does blockchain benefit HELOC lenders?

For lenders, blockchain technology can streamline application processing, increase underwriting efficiency, and eliminate the need for many third-party services—and the costs that come with them

Mike Cagney, CEO of Figure, told PYMNTS that blockchain reduces its lender-side costs so much (from thousands of dollars to “low hundreds”) that it makes HELOCs more attractive to originate

Blockchain reduces risk because records are unalterable. It also lowers the chance of costly, time-consuming mistakes thanks to its digitization of manual tasks.

Are there downsides to using blockchain for HELOCs?

Only a handful of lenders use blockchain to power their HELOC processes, but it isn’t because of downsides to borrowers. 

The technology is still fairly new and unfamiliar, so lenders may be waiting for the industry to embrace it before making the investment. Digital bank BBVA advises blockchain has high implementation costs

Lenders may also have concerns about digitizing payments or using digital currencies

What lenders use blockchain for HELOCs?

Our research found two lenders that offer blockchain-powered HELOCs: Figure and Synergy One Lending. Find out more below.


  • Best overall HELOC
  • 4.9 out of 5 stars
  • You must draw 100% of funds at line of credit origination with ability to redraw as you pay off the balance

One of the first lenders to integrate blockchain in its HELOC processes, Figure has used the technology to increase efficiency by 133 basis points (1.33%)—better than the 90-basis-point improvement it was targeting. 

Blockchain has also allowed Figure to speed up the funding process from weeks to just days. Check out our Figure HELOC review.

Synergy One Lending

  • Fixed rates
  • $25,000 minimum line of credit
  • As little as 5 minutes for approval and as few as 5 days to fund

Synergy One Lending also offers blockchain HELOCs. Since launching the product in mid-2021, it’s used the combination of blockchain and AI to speed up its preapproval time to just four minutes and its funding time to five days in many cases.

How important should a HELOC lender’s use of blockchain be in my decision-making?

It depends on your goals and priorities. If you want fast funding and an easier application process, a blockchain HELOC lender could be a smart move

However, if you’d prefer a more hands-on or in-person process, you might choose to contact a brick-and-mortar bank or credit union in your area.

If you’re unsure which route to take, compare both options, or talk to a mortgage professional. They can help you make the right choice for your goals.

For more about HELOCs, check out our resource: “What Is a Home Equity Line of Credit?