How Do HELOC Checks Work?

A home equity line of credit (HELOC) is a revolving loan secured by your home’s equity. It operates like a credit card—you only pay interest on the amount you borrow.

One of the most common ways lenders allow you to access funds is with HELOC checks. Often, you’ll receive them after closing on the HELOC. Some lenders may issue them for free, while others charge a fee.

Lenders may also allow you to access funds via an online transfer, credit or debit card, or an in-person withdrawal. We researched how HELOC checks work and the lenders that offer them.

In this guide:

What are HELOC checks?

After you close on a HELOC, a lender may issue you HELOC checks, or you might need to order them.

These checks are similar to personal checks, but they’re linked to your HELOC account. You can make out a HELOC to whomever you want—an individual or company, for example. Once the payee cashes the check, the lender subtracts the amount from your HELOC’s credit limit.

Based on our research, HELOC checks are more common than HELOC credit or debit cards. Eight of the nine lenders we researched offered HELOC checks. By comparison, only two provide HELOC cards.

Source: Southard Studio

Do I get cards or checks with a HELOC?

Accessing HELOC funds with a card or check varies by lender. Some lenders only allow you to use a check, card, or electronic transfer, while others allow you to choose.

Some financial institutions may require you to pay a fee when you order HELOC checks, while others don’t. The lenders we contacted don’t charge fees to use HELOC checks.

What can I use HELOC checks for?

You can use a HELOC check for almost any purpose. A lender we contacted said it has no restrictions on how borrowers use HELOC checks or to whom they write the check. So you can make out the check to another person, use it for retail purchases, or pay off high-interest debt.

You can also use a HELOC check for a real estate transaction— a down payment on a home, for example—but you’ll likely need a cashier’s check at closing. Specific HELOC lenders can provide this. 

What lenders issue checks with a HELOC?

Many lenders allow you to order checks with a HELOC, but some only allow you to access funds by other means. 

The table below shows how the lenders we researched enable consumers to access HELOC funds.

FAQ

Does my HELOC include starter checks?

Specific lenders might offer HELOC starter checks, but none of the lenders we contacted do. They told us borrowers could order standard HELOC checks after closing—which might take two weeks or longer to arrive.

Certain lenders can send a bank check via overnight mail, which you can deposit into your checking account to write a check sooner.

Can I use my HELOC checks anytime?

According to the lenders we spoke with, you can use HELOC checks anytime during the draw period. 

But once your HELOC’s draw period ends, you can only draw funds if you renew your HELOC.

How does repayment work if I use my HELOC checks?

Whether you purchase with a HELOC check, card, or another method, your repayment terms remain the same. During the draw period, you’re generally responsible for interest-only payments, though certain lenders may require you to repay part of the loan’s principal. 

After your draw period ends, the repayment period kicks in. You’re responsible for repaying interest and any outstanding balance during this period.

Are HELOC checks similar to credit card checks?

HELOC checks are similar to credit card checks in that you write a check to borrow against a line of credit. 

But the crucial difference is that a HELOC check allows you to tap your home’s equity. By comparison, a credit card check enables you to borrow against an unsecured line of credit.