Paying down your HELOC
Maintaining your home equity line of credit (HELOC) includes understanding the right strategies for paying it back. You only need to make monthly interest-only payments during the initial draw period, but paying on the principal as well can help you get the most of your available credit line. Here’s how you can work toward “zero balance.”
Keeping up with payments is key to a healthy financial life, especially when it comes to credit. When you’re approved for a home equity line of credit, you have access to a powerful tool for funding home improvements, education and more, thanks to the money you’ve put in your property. But there are rules to remember as you use and manage your HELOC.
HELOC draw and repayment periods
As an open-end line of credit, a HELOC lets you use your available balance again and again during your initial 10-year draw period. If you have a remaining balance at the end of this draw period, it shifts into a repayment period and you’ll no longer be able to draw from it. Alternatively, you can also apply to refinance into a new HELOC with a fresh 10-year draw period.
Making payments
Once you start using your HELOC, you can make interest-only payments once a month during the draw period, just for the money you’ve used.
There’s also no penalty for paying down the principal part of your balance early, along with your monthly interest payments. As you pay down the principal balance, you’ll be able to draw from it again.
You can also convert your HELOC to a fixed-rate option¹ on all or part of your draw balances for terms up to 20 years. That way, you won't have to worry about unexpected rate increases.
Can I get it down to zero?
You can always see the balance you owe on your HELOC in Associated Bank Digital.² However, that amount may not show the accrued interest through your payoff/paydown date. If you want to be sure you’re getting it down to zero, call Associated Bank Customer Care at 800-236-8866 or stop in your local branch.
No fee will be assessed when converting to a fixed-rate option. If there is a current fixed-rate option that is requested to be unlocked, a $100 fee will apply. The fixed-rate option can primarily be done in person at an Associated Bank branch or by calling 1-866-LEND ABC (536-3222). (1331)
Associated Bank does not charge a fee to download our digital applications; however, transactional fees may apply. Carrier message and data rates may apply, check your carrier’s plan for details. Visit AssociatedBank.com/disclosures for Terms and Conditions for your service. (1406)
