Should You Pay for College With a HELOC?

If you’re planning to attend college in the near future and need more oomph in your financial package, you’re likely wondering if you should pay for college expenses with a HELOC. The answer to that question will likely depend on your particular situation. To get a personalized answer and the assistance you need, consult with the financial team at Bellco Federal Credit Union for remarkable customer service. 

Bellco Federal Credit Union began 81 years ago as Bell Telephone Credit Union. The employees of Bell Telephone Credit Union created a trustworthy banking institution, and members still have a voice today. We serve the community rather than shareholders and work hard to provide special financing to the individuals and businesses of Berks County, PA. 

Proud to provide our members with the best possible rates, we’re ready to serve. If you do decide that a HELOC is right for your educational expenses, we’re likely the best source for the financing. If you live, worship, work, or go to school in Berks County, PA or have a parent, grandparent, or sibling who is a Bellco FCU member, you’re qualified for membership. All that you’ll have to do is open a Member Savings account with a small deposit. 

Once you have membership in the credit union, you’ll retain it for life. You may change jobs or residences without consequence. You’ll still be able to access your account, and your immediate family will still be able to establish credit union membership.

Understanding How a HELOC Will Work

A HELOC operates as a revolving line of credit that can be accessed when funds are needed, up to a set credit limit. You’ll likely have a lower interest rate than a mortgage or credit card because the funds are secured by the equity in your home. The rates are adjustable, so they might change over the course of the loan. 

The period when you can borrow on a HELOC lasts either five or ten years and is referred to as the “draw period.” Funds can be accessed as often as necessary as long as your loan balance has been paid down. When you have regular costs like books or tuition, a HELOC might be the perfect answer.   

The second period of a HELOC is the repayment period. It occurs at the end of the draw period, and you’ll begin making regular monthly payments that include principle and interest until the balance is paid back.

Knowing how much you’ll be able to anticipate with a HELOC is a fairly simple matter. The equity, or security, for the line of credit is the difference between your home’s value and your mortgage balance. Depending on your income, credit score, and other lending factors, you will likely be able to borrow up to 80 or 90% of your home’s equity.

Your college financing will likely include a combination of products, including scholarships, grants, and loans. If these aren’t available to you, or you need a bit more to cover books or housing costs, you should pay for college with a HELOC. Reach out to our expert staff today for guidance about your situation or to complete the application. We’re committed to making your educational goals attainable. Finances shouldn’t stand in the way of your dreams.