My favorite way to pay off debt fast is to use Velocity Banking. Velocity Banking is a strategy where you use a revolving line of credit as your primary checking account to help pay off your student loans or mortgage. In this strategy, you use your line of credit to pay off a huge lump sum of your loan. Using your line of credit as your primary checking account helps you use your extra cashflow towards paying down your debt so you can “chunk” another lump sum towards your principle.
I purchased a new home and started making payments on my $282,000 mortgage on January 2019. Based on my amortization schedule and chunking history, I expect to pay off my home by 2026 (In Just 7 years).
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For those just tuning into Finance Throttle, my wife and I purchased our home with a mortgage of $282,000 @4.5% on January 1st, 2019. Just a short 2 years later, we paid off about $83,000 and now owe about $199,000. After a long 6 month process, our refinance finally closed in February of 2021. We refinanced our home for $225,604 @2.5% with no cash out option. I used my HELOC to pay for my closing costs, then scheduled a $25,000…
The concept of Velocity Banking revolves around paying off your loans in large chunks using borrowed money from a line of credit, allowing you to save thousands in interest and many years off in paying your amortized loans. As a Velocity Banker, you take what is left over in your account each week or each month and use it to pay down your Line of Credit. When you have a bill to pay, borrow money from your low interest line…
Velocity Banking uses a line of credit to pay off your ammortized mortgage or student loan. The concept includes borrowing money at simple interest to pay for a loan that charges amortized interest, thus saving you huge amounts of money on your loan. To get a good credit card or get a home equity line of credit, you need a good credit report. What if you don't have credit? You can still follow the velocity banking method to pay your…
Before I get into this, I should explain that I have been using the velocity banking method for 1 year now, and it has already shaved off 11 years and over $54,000 of interest from my mortgage. IT WORKS!! I plan to be done paying off my new house by 2026. To explain velocity banking, I have to explain the basics. A loan is a lump sum of money you borrow and pay back over a fixed term. It is…
