How to Access HELOC Funds: 5 Ways to Withdraw

One of the defining features of home equity lines of credit (HELOCs) is their versatility. You can borrow money, repay it, and borrow again as often as you like while it’s active without having to reapply each time. You’re often more in control of your interest charges, too, since you can choose not to withdraw if you don’t need to.

Another handy feature is the number of options for accessing HELOC funds. Unlike loans that are generally deposited straight into your bank account, most lenders offer several ways you can borrow from your HELOC. Before you apply for a HELOC, it’s good to consider which draw options suit your needs the best. 

1. Credit card

Many home equity line of credit lenders allow you to access funds using a credit card exactly the same way you’d use a normal credit or debit card. In this case, however, the money you spend is added to the outstanding balance of your HELOC, rather than to an unsecured credit card ledger. 

Some HELOC lenders, like Aven with its home-equity-backed credit card, even offer cashback rewards like you’d find with a rewards credit card. Keep in mind that some lenders charge a transaction fee for each HELOC withdrawal you request, which can really add up if you make many smaller withdrawals like people often do with credit cards. 

The main benefit of HELOC cards is that you can spend money immediately from your HELOC—no waiting for transfers to take place. This can be particularly handy if, for example, you’re DIYing a home renovation project. You can purchase materials as needed using your HELOC card. 

There are drawbacks to having such quick access to HELOC funds, however. If money is too easy to spend, it may be easier to end up in more debt than you bargained for—something you want to be especially careful of since the debt is tied to your home. Your home could be foreclosed on if you can’t repay the debt. 

2. HELOC checks

Credit cards are handy, but even more lenders offer HELOC checks as a quick way to access your HELOC. You can use HELOC checks in exactly the same way as you’d use paper checks from your checking account. 

If your lender offers this option, you’ll often be offered a box of paper checks when you first open your account. They may be free or may cost a small fee; you’ll need to ask your lender for details. If your lender does offer HELOC checks, you’ll usually be able to buy more checks later if you run out. 

Keep in mind that not all merchants accept checks, so they’re best used as a supplemental way to access HELOC funds. You also generally can’t use them for online purchases unless the merchant accepts mailed-in checks; a slow and clunky process when paired up with online shopping. 

Checks are a good option if you’re looking for something that lets you spend money in the moment but makes you think about each purchase more than swiping a credit card. For some people, the simple act of writing a paper check is enough of an interruption to help them avoid unnecessary spending.

3. Cash withdrawal

Cash isn’t as popular a payment option today as it was before the modern world of payment methods expanded, but its universality is undeniable. Aside from buying things online, cash is accepted just about everywhere. 

You can access cash from your HELOC using most of the other draw methods on this list, at least indirectly. For example, you may be able to use your HELOC credit card at an ATM to withdraw funds or transfer money into your checking account that you withdraw as cash later. 

If your HELOC lender also happens to be a bank with in-person branches, you may be able to skip all of that and get paper currency directly from the source by visiting a location near you. 

Make sure you take precautions, however. Losing a check you wrote out for $5,000 isn’t as devastating or dangerous as misplacing $5,000 in cash, for example. 

4. Online account transfer

The most common way to access HELOC funds is by requesting an online account transfer into your main checking account. 

This is especially true for online lenders, who may not have physical branch locations you can visit to request funds in person. In fact, it may be the only HELOC withdrawal option offered by some online HELOC lenders, like Figure. 

Requesting a HELOC draw into your bank account can take a few hours to several days, depending on various factors:

• How quickly the lender can process your request
• Whether your lender sends funds via a slower ACH transfer or a faster wire transfer.
• Whether you request the draw before weekends, holidays, or other non-business days.
• Whether you’ve completed any lender-required security verifications (if any) for the receiving bank account.

Online HELOC transfers are very handy for occasional large withdrawals, which honestly aligns better with the best ways to use HELOCs in the first place—i.e., large, infrequent, and intentional purchases such as hiring contractors to renovate your home or replacing large appliances. 

5. Transfer by phone

Some lenders also allow you to request HELOC withdrawals over the phone, but this isn’t as common with most lenders. In our experience, banks and credit unions are more likely to offer this option than lenders that operate entirely online and may not have staffed call centers like other financial institutions. 

If you request a HELOC withdrawal over the phone, it’ll generally work the same as if you’d submitted an online transfer request, only someone will fill out the form for you. Your funds will still generally be sent via ACH or wire transfer. 

Requesting a transfer via phone does give you the added benefit of having a live human on the other end of the line who can answer any questions you’re unsure about, such as how much longer you have in your draw period or how you can repay the funds.

I recommend taking HELOC withdrawals for large planned or unplanned expenses and ideally avoid withdrawing HELOC funds akin to smaller credit card transactions. The initial withdrawal recommendations will ultimately depend on the client’s situation, such as the purpose of the funds, whether this will result in frequent or infrequent withdrawals (and the fees associated with each withdrawal), and what type of transaction methods the client prefers and/or what payment method is required by the person/company providing the service.