Velocity Banking is a financial strategy for accelerated mortgage payoff using HELOCs. This approach channels income through a line of credit to reduce principal balances faster. The strategy works by leveraging lower-interest credit to pay off high-interest debt. Many Canadians find velocity banking legitimate when following its principles with discipline. Successful implementation requires positive cash flow and careful planning. Potential downsides include adjustable HELOC rates and credit score requirements. The method differs from Infinite Banking, which focuses on asset building rather than debt reduction. Canadians can use this strategy to pay off various debts including mortgages, credit cards, and auto loans. Starting velocity banking involves assessing finances, organizing expenses, and setting up optimal accounts.
Velocity banking is a financial strategy to achieve mortgage payoff by using the HELOC (Home Equity Line of Credit). Velocity banking principles funnel all funds via the HELOC which helps in quicker pay off of amortized debts. As per Alexandre Fortier-Lobonte and Marisa McGillivray of Statistic Canada, in the article, ‘The evolving landscape of Canadian Lending: Key trends in mortgage and non-mortgage loans’, HELOCs are part of loan products that made up 78% of all loans in 2023. The stable income of an individual is used to reduce HELOC (Home Equity Line of Credit) principal balance from which principal payments of mortgage debt are made. IBC Financial offers comprehensive financial planning and debt management plans that help in achieving true financial freedom.
Yes, Velocity banking works as it uses a line of credit as a debt instrument to borrow against. Velocity banking strategy involves rapid debt reduction of credit card loans and mortgages. As stated by Steve Huebl of Canadian Mortgage Trends, in his article ‘Mortgage Digest: Fixed mortgage rates keep falling, but variable-rate pricing is on the rise’, borrowers using a fixed-rate mortgage will find they need to pay less due to the recent cuts in loan interest rate. This makes it easy on these borrowers to manage their debt to income ratio. IBC Financial uses innovative debt repayment strategy that help Canadians manage their wealth effectively through careful planning.
Yes, Velocity banking is a legitimate debt reduction method to get out of cancerous consumer debt and become completely debt free. Velocity banking works when you are determined and disciplined enough to follow the velocity banking principles. In accordance with Tiffany Curtis of Nerd Wallet in the article, Pay Off Debt: Strategies and Tips, learning strategies to reduce your debt balance is ideal for paying off debt without hassle. Velocity banking uses a meticulous budgeting method as part of its cash flow management strategy. When this is followed with discipline, it optimizes the positive cash flow of a borrower. This gives better results than typical bank approaches.
Yes, Velocity banking is an excellent idea as it helps to reduce mortgage balance amounts quickly. Velocity banking helps lower the interest you pay on interest-accruing loans and helps pay off your principal daily balance quickly. As reported by Caitlyn Moorhead of Yahoo Finance, in the article, ‘Dave Ramsey Says to Pay Off Your Mortgage Early- But Should You?’, paying your mortgage quickly can accelerate your financial wealth building process. But you need to consider factors like risk tolerance, financial goals, and the rate of ROI, among others, to decide on a holistic approach to saving. The expert guides at IBC can provide you with personalized guidance through long-term wealth building. They offer help in a wide range of areas like life insurance and investment products with death benefit advantages.
The downsides of Velocity banking are many. The downsides of velocity banking include the following:
As noted by Denzel Rodriguez, in the article ‘Pros and Cons of Velocity Banking’, the downsides of velocity banking however do not outdo the long-term benefits that include paying less interest, freeing up equity, and paying off your high-interest debt early. Having additional monthly cash flow or discretionary cash flow helps to make the lump sum payment process more effective. The policy loan rate is another alternative to consider. You can make use of the life insurance cash value accumulation and borrow via policy loans which gives you more control over your cash flow management tactics.
Yes, Velocity banking is available in Canada. Velocity banking is a concept that can be used in Canada to help reduce debt quickly using a line of credit. In the view of the Credit Counselling Society, in the guide ’13 Money Saving Tricks to Pay Off Debt Quickly’, using a strategic plan and staying focused on it will help in faster loan repayment. Funneling your entire paycheck to make extra payments, can reduce your repayment term considerably. IBC Financial has the expertise to help you manage your finances with various financial instruments through online banking optionsV
Velocity banking can be used to pay off debt by depositing your income in a HELOC (Home Equity Line of Credit). Velocity banking helps to pay off bad debt even without using a HELOC (Home Equity Line of Credit). As mentioned by Sandra Fry of Financial Post, in the article, “It’s easy to complain about the cost of living, but it is not the cause of all debt troubles”, recognizing your spending habits and paying off cancerous debts can improve your current situation. You can gain financial freedom and stability. A lack of understanding of how consumer debt accumulates can result in greater difficulty in repayments and mounting debt woes with each billing cycle.
Using the HELOC (Home Equity Line of Credit) will help in paying down the principal amount faster. This will reduce the front-loaded interest. Additionally, the strategy can be used to eliminate credit card daily balance amounts. Focusing on the following three aspects can help reduce bad debt:
Yes, Velocity Banking can pay off a mortgage. Velocity banking pays off a mortgage by making large principal payments via a HELOC (Home Equity Line of Credit). As observed by the Financial Consumer Agency of Canada, a HELOC has a lower interest rate than other credit loan products. By redirecting your monthly income to the HELOC and paying your debts aggressively, you avoid accumulating more bad debt. This approach is termed paycheck parking. This paycheck parking allows you to reduce the initial debt amounts resulting in fewer interest payments. You can now focus on paying off the principal mortgage payment. This saves money spent on long-term interest payments. For instance, if you have a 20-year mortgage payment, it can be reduced to 10 or 15 based on how you manage the minimum payments, bringing balance between saving and paying debt.
Yes, you can do velocity banking with a HELOC (Home Equity Line of Credit). Velocity banking can be done with HELOC (Home Equity Line of Credit) as the approach uses this credit method to manage debt. In the words of Richard Best of Investopedia in the article, ‘5 Ways Not To Use Your Home Equity Line of Credit’, using the method can help increase home equity. This is a secure credit tool that uses your home as collateral for bank loans. You pay income directly into the HELOC and use a card for expenses to cover expenses.
Yes, you can use Velocity banking to pay off your credit card balance. Velocity banking can help pay off your credit card debts using a principle that is similar to making of entire mortgage payments. According to Keph Senett of MoneySense in the article, ‘How much credit card debt does the average Canadian have’, there is a steady increase in the number of Canadians with credit card debt of around $2.5 trillion in 2024. With the velocity banking strategy, you can use a line of credit to pay off a high-interest-rate credit card. The next step is to use your monthly income to repay the line of credit. This will help in faster bad debt payments with a one-month advantage, providing distinct advantages over traditional debt repayment methods.
Yes, you can use Velocity banking to pay a car loan or motorcycle loan. Car or auto loans can be paid off with velocity banking principal via a line of credit usage and making lump sum payments. As per Marjean Chacon on LinkedIn, in the article, ‘The beginner’s guide to velocity banking with credit cards’, a regular monthly income, a credit source like a credit card, and cash flow are necessary. As per a Transunion Industry study on consumer credit trends, auto loan amounts increased by up 1% year over year. By using strategies like velocity banking, you can reduce the bad debt amount gradually and save money, avoiding critical loan complications.
Yes, Velocity banking can work with a negative cash flow. Velocity banking can be used with a negative cash flow as the strategy uses lines of credit that aid rapid debt reduction, freeing up cash flow. As stated by Nino Gonzalez of Financial Fitness Pod in the article, Velocity Banking: Next Level Strategies Explained, using a revolving line of credit or life insurance policies with cash value growth is ideal. Reducing monthly expenses, increasing your building through income, and creating a budget are some ways to counter a negative cash flow situation. IBC Financial offers a wide range of life insurance policies with access to cash value that you can use as a solution for your negative cash flow situationB
You can start velocity banking in a few simple steps. To start velocity banking, you need to do the following:
As reported by Leanne Escobal and Tim Falk of Finder site, by the end of November 2024, interest rates on unsecured and secured loans increased to 9.41% for the former and 5.65% for the latter. The interest rates can vary based on existing debts, credit scores, and income of Canadians. By doing meticulous research, you can find the efficient loan products that offer the best interest rates. This will help to avoid higher interest-rate options. IBC Financial follows the Infinite banking principle of Nash. These powerful concepts help people achieve financial freedom and grow their wealth through various investment opportunities.
No, Velocity banking and Infinite Banking are not the same. Velocity banking and infinite banking concept are however related. Velocity Banking is used to reduce bad debt like mortgage payments, auto loans, and others. Infinite Banking is used to build a financial asset. both systems are used to leverage wealth building. Our team at IBC Financial offers premier financial freedom and life insurance guidance that is customized for Canadians through estate planning tools.
IBC Financial are the experts at Velocity banking. Our experts use the infinite banking system and Life Insurance as a Source of Liquidity. Our life insurance policyholders can use their positive cash flow or cash value as a line of credit with cash availability and flexibility in fund usage. The team of professional financial experts at IBC Financial provides guidance on retirement planning and the best way to implement the strategy and build wealth through Banking Truths and Truth Concepts. IBC works with clients with options for business accounts, improvement loans, personal loans, asset-backed loans, and additional loan products. Get in touch with us today and book a 30-minute consultation now to explore all aspects of velocity banking, loan choice processes, balance transfer opportunities, and cash-flowing opportunities while respecting annual contribution limits.
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