Getting out of debt and attaining financial independence can be a trying experience. Most people have been accumulating debt at lightning speeds, and it makes sense that we would look for ways to get out of debt just as fast.
It doesn’t help that there are numerous clickbait marketing tactics out there that claim you can pay off a traditional mortgage in five to seven years using this strategy or that strategy. By this we are simply implying to the velocity banking strategy.
Actually, velocity banking is an excellent strategy worth leveraging if you want to get out of debt provided, you’re willing to commit and you have the discipline to make it actually work. So what exactly is velocity bank, how does it work, and is it an ideal strategy for everyone.
Before going any further, you should remember that the velocity banking strategy focuses on using a Home Equity Line of Credit (HELOC). It can be done with a personal life of credit as well, but in general, a readvanced HELOC is the most common method leveraged.
When you choose to deposit income into a HELOC, you’re essentially canceling interest on the periods of a month in which your money would typically be sitting collecting dust. The lender only charges you interest on an average daily balance.
In the event that your income compresses the line of credit during the lull periods of the month and sitting stagnant, there is the option of canceling some of the interest that would otherwise accrue each day.
An important point to note is that the velocity banking strategy fundamentally rests on the actions and financial behavior of the person implementing it. For this reason, it will either work beautifully or simply fail. In short, the result is entirely based on the user.
Provided you follow through on your financial plan and operate with the right mindset, you will probably receive the success you want from velocity bank. So what are you waiting for before you finally get going with velocity banking strategy?