đź’ˇ TSM Tips: Setting the Right HELOC Limit
One of the most common questions we get is:
“What should I set as my HELOC limit?”
Here’s our recommendation:
We always encourage you to get your HELOC limit as high as possible. Why?
✅ It gives you flexibility — access to cash if you need it for investments or unexpected expenses.
✅ In the software, we may not even use all of that limit — the software typically leverages up to 85% of your HELOC limit.
đź“Š How to Monitor Your HELOC in the Software
You can always check how much of your HELOC the software is planning to use:
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Go to your LOC Account Report.
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See what balance the software projects you’ll carry on your HELOC.
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Multiply that balance by your interest rate to estimate how much interest you’re paying per year.
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Then multiply that yearly interest by the number of years the software shows you’ll take to pay everything off — this will give you a good idea of total interest paid compared to your projected savings.
If you determine that the balance or total interest doesn’t make sense for your situation, you have options!
đź› Adjusting Your HELOC Strategy
If you’d rather keep a lower balance on your HELOC or start paying it down:
➡️ Go to your Shred Account on the Financial Information tab.
➡️ Uncheck the box that says “Enable Maximization.”
This will shift the focus of your plan and prioritize paying down the HELOC.
You can also enter a lower limit in the software if you know you’ll need some of that HELOC for a future expense or investment — this ensures your plan leaves room for that need.
💬 FYI: Most of our members tend to have a limit of $50-100k on their HELOCs, but restrict the amount available in the software to a number they’re most comfortable with. Adam himself keeps at least $25–30k on balance in his own LOC.
If you have any questions about setting your HELOC limit or want help reviewing your plan, feel free to email us at hello@theshredmethod.com — we’re happy to guide you!
We also want to ask you a favor. We're currently trying to build a database of HELOC providers to help new members find a lender wherever they may be based. We would greatly appreciate it if you could fill out this form based on your HELOC provider.
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