Do More with a 0% APR HELOC Do More with a 0% APR HELOC

There are several easy ways to access the funds in your line of credit.

• Transfer funds from your line of credit to another UW Credit Union account directly from Web Branch.
• Visit a branch to get a cashier’s check.
• Request checks for your home equity line of credit.

With a home equity line of credit (HELOC) from UW Credit Union, you can borrow up to 100% of your home’s equity as a line of credit. It’s very convenient, and it works similarly to a credit card. Borrow what you need, when you need it, until you reach your credit limit. Here are more details about using your HELOC:

Withdrawing money during the draw period: This is the set amount of time (usually five years) that you can borrow from your line of credit. You can extend your draw period, depending on your credit situation.

Repaying during the draw period: During the draw period, you can make the minimum payments on what you’ve borrowed, however we encourage paying more to reduce the balance.

Repayment period: Once the draw period ends, you won’t be able to withdraw funds. At this point, your loan enters the repayment period, when your payments will include both principal and interest. These payments will be a lot higher than the interest-only payments you made during the draw period.

Credit cards and HELOCs both act as revolving lines of credit, meaning you can borrow funds up to a set limit. As you pay back what you borrow, you can use those funds again, and you pay interest only on what you borrow. Credit cards are typically used for everyday spending (groceries, entertainment, etc.) while your HELOC is best used to cover big expenses (home improvements, college tuition, etc.).

Both options include benefits - credit cards often offer rewards, cash back, purchase protection and more. HELOCs usually have a lower interest rate than credit cards, and interest may be tax deductible if it's used toward home improvements (consult your tax advisor).

One financial strategy that may give you the best of both worlds is to pay for big purchases with your credit card, so you can take advantage of your card's rewards program. Then, promptly pay off your credit card balance with your HELOC to enjoy the low rate and generous repayment terms. 

Request a call with a lending expert to learn more.

Your home equity line of credit includes a five-year draw period which allows you access to the funds in your line of credit. At the end of the draw period, qualified borrowers may choose to renew the line of credit for another five-year draw period. Draw period renewal is free with a Value or Premium checking account or a $100 fee applies. Qualified borrowers may choose to renew the draw period up to two times.

The APR is subject to change monthly but cannot exceed 18%. APRs on the home equity line of credit also have a floor rate, depending on the product type.