Are HELOCs transfer and withdrawal instant?

One of the key benefits of home equity lines of credit (HELOCs) over other borrowing options is its flexibility. Sometimes, when you need to borrow money, you need it right now — not days later. 

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Some HELOC transfer and withdrawal options can be instant, while others take longer to process, so it’s a good idea to choose your withdrawal method wisely. Let’s look at the best options if you’re in a bind and need to borrow money pronto from your HELOC.  

How a HELOC and funding work

A HELOC allows you to borrow money up to a pre-set credit limit based on how much home equity you have and other factors such as your credit score. You can withdraw funds during a five to 10-year draw period, making interest-only payments before access to your credit line stops. 

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When the draw period ends, you’ll begin paying back the principal and interest on your debt, similar to a home equity loan or personal loan. Your monthly payment amount may change over time, however, because HELOCs typically charge variable rates that can shift with the economic winds. 

HELOC withdrawal methods

Depending on how your HELOC draw period works, you may be able to access money through one or more of the following options:

• Check: Some lenders supply you with a checkbook when you open up a HELOC, similar to the one you get with a checking account.
• Phone: You may be able to request a draw from your HELOC by calling your lender directly.
• Online: Most commonly, you can initiate a digital transfer from your HELOC to your checking account online — in the same way you’d move money from your savings account to your checking account.
• In person: It’s possible to visit a branch location to transfer money from your HELOC to your checking account, or withdraw it directly in cash. 
• Debit card: Some lenders offer a debit card that you can swipe directly at a cash register to make a purchase or to withdraw money from an ATM, similar to how you’d use a credit card.

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You can check which of these options is available to you by looking through your HELOC agreement, checking your online account, or asking your lender directly. 

Is a HELOC transfer and withdrawal instant?

Not all HELOC transfers and withdrawals are instant, but some are. Here are the best ways to withdraw funds from your HELOC if you need money immediately:

• Check: Funds generally take a few business days to settle and clear, but if a merchant accepts it, you can use it to pay directly for a purchase.
• In person: If your HELOC lender operates a local branch, you may be able to withdraw funds directly as cash by visiting a nearby location.
• Debit card: Use it directly to pay at the register or to get cash from an ATM.
• HELOC transfer: Requesting a transfer — either online, in person, or over the phone — can be instantaneous if your HELOC and checking account are with the same bank.

Factors that affect HELOC transfer and withdrawal times

The type of transfer or withdrawal you select has the biggest impact on HELOC funding speed, but other things can impact it, too. Here are some things to keep in mind when speed is of the essence:

• Transfer method: Wire transfers can take several days to process, whereas ATM cash withdrawals are instant. 
• Time of day and week: HELOC withdrawals initiated over the weekend, on holidays, or after business hours may be delayed.
• Bank or lender policies: Each institution sets different policies that can affect how fast your money flows, how much you can withdraw at a time, which options you have for making those withdrawals, and more. 
• Bank and lender choice: Transfers within the same bank are usually instant, whereas transferring money between banks takes a few days. Open a HELOC with your existing bank (if available) for the fastest transfers. 
• Linked account verification: It can take a few extra days to wait for test deposits if you’re transferring HELOC funds into a new bank account. 

Things to remember when considering a HELOC draw

Having access to instant HELOC transfers and withdrawals can really come in handy in a pinch, but there are downsides, too. It’s a good idea to consider a few things before you take each draw: 

• Draw fees: Some lenders charge a fee each time you draw from your HELOC.
• Required draws: Some lenders require you to borrow money, such as when you first open your HELOC or after you’ve gone for a period of time without taking a draw.
• Current interest rates: Check how much your lender is charging for interest compared to your other borrowing options — it may not always be cheaper.
• Risk of overborrowing: Ask yourself before each draw: Do you really need to borrow the money, or can you afford to save? You don’t want to overleverage yourself, especially since your lender can foreclose on your home if you’re unable to repay the HELOC.
• Change in monthly payment: Consider whether you’re able to afford a higher payment if you borrow more. Remember, you can always pay down your HELOC faster to save money on interest, regain home equity, and refresh your credit line. 
• Withdrawal minimums and limits: HELOC lenders may set minimum draw amounts, which can result in unnecessary borrowing if you don’t need that much money. There may also be limits on how much you can borrow at a time using certain methods, such as from an ATM. 

Can you use a HELOC as an emergency fund?

If you’re still working on saving up an emergency fund, a HELOC can be an acceptable substitute as long as you’ve worked through your budget and you’re confident in your ability to repay any amount of money you borrow. 

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After all, using a HELOC as a backup borrowing option helps many people sleep better at night — and that has an overall positive impact on your health. It’s like an extra security blanket that can help you live a happier life and focus on other things, including building up a cash reserve that you can use for emergencies instead of a HELOC.  

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Experts don’t suggest always relying on a HELOC alone for emergencies, however, so it’s a good idea to set a concrete plan in place to save up. Take a look at your budget to see how much you can afford to set aside each month. Set up automatic transfers into your savings account right after you get paid so that you can build your emergency fund automatically and gradually reduce your reliance on your HELOC. 

Frequently asked questions

How fast can you get cash from a HELOC?

If your lender offers an ATM card or allows you to make same-day withdrawals at a physical branch, you can get cash immediately from a nearby location. Otherwise, the process of transferring money can take a few days, depending on your bank’s policies and when you request the draw. 

Can you transfer money from your HELOC to your bank account?

Yes. Most lenders allow you to transfer money from your HELOC to your bank account, but only if you have available credit during the draw period, which typically lasts five to 10 years. Other options to get funds from your HELOC include withdrawing money in person at a branch location or an ATM, writing a check, or swiping a debit card linked to your HELOC. 

Can I withdraw HELOC funds instantly from an ATM?

Yes, if your lender allows it. Many offer HELOCs with paired debit cards that you can use to withdraw money from an ATM. Many lenders also allow you to use the debit card or a checkbook to pay for purchases directly from your HELOC. 

Final thoughts

If you’re looking to maintain quick funding access, a HELOC is a good alternative to other home equity financing products like cash-out refinances or home equity loans. These products offer fixed rates you can count on and similar loan amounts as HELOCs, but you need to reapply for them each time — hardly something you can count on in a stressful situation when you need cash now.

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If you’ll be relying on your HELOC for instant transfers and withdrawals, it’s a good idea to be strategic about your lender choice. Start with your own bank or credit union since transfers within the same bank are usually instantaneous, whereas transfers between banks are not. If you’ll be using your HELOC for smaller over-the-counter purchases (as opposed to borrowing larger chunks of money at a time), look for HELOCs that offer a paper checkbook or a debit card. 

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If qualifying for a HELOC is difficult due to low credit or income, explore Point’s Home Equity Investment. You can tap into your equity with no monthly payments, no need for perfect credit, and no income requirements. Prequalify with no commitment to continue. 

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