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What is Velocity Banking? The Truth from Someone Who Actually Tried It

Published April 2, 2025 | By grebinb

What is Velocity Banking? (And Why I Actually Tried It)

What is velocity banking? That was the question I found myself Googling late one night when I was neck-deep in mortgage payments, wondering if I’d ever get ahead. I’d seen a few flashy YouTube videos, heard people say it was a “hack to beat the banks,” and I’ll be honest—I was skeptical. But curiosity got the better of me, and eventually, I decided to try it for myself.

Here’s what I learned, what actually happened, and whether or not I think it’s worth your time.

Before I ever heard the term velocity banking, I was just a regular person with a regular mortgage, making regular payments… and feeling like I was on a 30-year treadmill. Maybe you can relate?

I started asking questions like:

“Why am I paying so much in interest?”
“Is there a smarter way to use my income?”
“Can I actually outsmart the bank at their own game?”

That’s when I stumbled onto velocity banking—and yes, at first it sounded like some weird financial hack. But once I dug deeper, I realized it’s actually based on a very simple idea.

🧠 The Basic Idea of Velocity Banking

Velocity banking is a strategy where you use a line of credit—usually a HELOC (Home Equity Line of Credit)—as a sort of “financial base camp” to cycle your income and debt more efficiently.

Here’s the core concept:

You deposit your income into your HELOC instead of your checking account.
You use the HELOC to pay your monthly expenses.
Whatever’s left stays in the HELOC, which lowers the balance—and therefore the interest charged.
You use chunks of that HELOC to pay down your mortgage or other high-interest debt faster.

Because HELOCs are simple interest, and mortgages are usually compound interest, this strategy lets you chip away at your debt more efficiently—if done right.

📉 A Simple Example

Let’s say you have:

A mortgage with $200,000 left
A HELOC with a $20,000 limit
Monthly income: $5,000
Monthly expenses: $3,500

With velocity banking, you might:

Use the HELOC to make a $10,000 payment on your mortgage.
Deposit your income into the HELOC each month.
Cover your expenses from the HELOC.

That leftover $1,500/month is now automatically reducing your HELOC balance, which means you pay less interest over time, and you’re knocking out your mortgage faster than the banks ever expected.

🛑 But Hold On—This Isn’t for Everyone

Here’s where I want to be ethical and transparent: velocity banking has risks.

You must have positive cash flow.
If you don’t track your spending, you could dig yourself a deeper hole.
If HELOC interest rates rise (which they can), the strategy may not work as planned.
If you’re not disciplined, this is just a fancier way to stay in debt.

That’s why I always tell people: do the math, not the hype.

💬 Why I Gave It a Try

Personally, I was frustrated. I hated the idea of throwing thousands of dollars toward interest every year when I could be using that money for my family or future.

I tried a basic version of velocity banking using a smaller line of credit (not a HELOC at first) to pay down credit card debt. It forced me to track my spending, get serious about my monthly cash flow, and think differently about how I used my money.

I’m still learning, but the mindset shift alone was powerful.

🧰 Want to See How It Might Work for You?

I’m working on a free velocity banking calculator you can download soon (stay tuned).

In the meantime, here are a few tools that helped me get started:

💡 Bottom Line

Velocity banking isn’t magic. It’s just math—and mindset.

If you’re serious about using your income more effectively, and you’re willing to track your money and learn how interest works, it could be a useful tool.

And if not? That’s okay too. There’s no one-size-fits-all in finance. Just smart, curious people (like you) trying to do better.

What is a HELOC? (And How I Learned to Use One Without Screwing Up)

Published April 2, 2025 | By grebinb

What is a HELOC? That was my exact question when someone first mentioned using one to pay off debt. I thought HELOCs were just fancy loans for rich people doing kitchen remodels. But the more I looked into it, the more I realized: this might actually be a smart tool—if I used it right.

In this post, I’ll break down exactly what a HELOC is, how it works, how I used it (carefully), and the biggest mistakes to avoid.

💬 What is a HELOC?

A HELOC, or Home Equity Line of Credit, is a revolving line of credit that’s tied to the equity in your home. Think of it like a credit card—but instead of being based on your credit limit, it’s based on how much of your home you own.

So if your home is worth $400,000 and you still owe $200,000 on your mortgage, you might have $200,000 in equity. Banks will typically let you access 80–90% of that equity through a HELOC.

🧰 How It Works (In Plain English)

You apply through a bank or credit union.
Once approved, you get access to a credit limit (like $30k or $50k).
You can borrow and repay money repeatedly, just like a credit card.
You only pay interest on the amount you actually use.

It usually comes with:

Variable interest rates
A draw period (5–10 years to borrow)
A repayment period (10–20 years to pay it back)

💸 How I Used It (and Didn’t Regret It)

I used my HELOC to:

Pay off high-interest credit cards
Lower my monthly payments
Help fund a few home upgrades without racking up new debt

But the key was: I didn’t treat it like free money. I tracked every dollar. I made extra payments. I avoided “just in case” spending.

Honestly? It felt like unlocking a financial pressure valve.

🛑 The Risks You Need to Know

Let’s be real—HELOCs aren’t magic. They can get you in trouble if:

You use them to spend more, not pay down debt
Interest rates rise and you can’t keep up
You stop budgeting and treat it like a windfall
You borrow too close to your home’s value (risky if the market dips)

💡 Final Thoughts

A HELOC is a tool—nothing more. Used wisely, it can help you breathe financially, pay off high-interest debt, or invest in your home.

Used recklessly? It’s just another way to dig yourself in deeper.

If you’re thinking about velocity banking, cash flow optimization, or getting smarter with how you use your income… a HELOC might be worth looking into.

Just promise me one thing: Run the numbers first. Not the hype. Not the dream. The actual math.

🛠️ Resources I Recommend:

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Published December 7, 2022 | By grebinb

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