What is velocity banking?

Velocity banking is a financial strategy that involves using a line of credit to accelerate debt repayment and build wealth more quickly. The idea is to strategically borrow against a line of credit (such as a home equity line of credit or personal line of credit) to pay off high-interest debts, such as credit card balances or student loans, and then repay the line of credit as quickly as possible.

By constantly cycling money through the line of credit, borrowers can minimize the amount of interest they pay on their debts and potentially save thousands of dollars in interest payments over time. Accelerating debt repayment can also free up cash flow, allowing individuals to build savings, investments, and wealth more quickly.

Velocity banking requires discipline and careful planning to be effective, and it may not be suitable for everyone. It is important to carefully research and understand the risks and benefits of velocity banking before implementing this strategy. Consulting with a financial advisor or professional is recommended to ensure that velocity banking is the right approach for your specific financial situation.