Can you use a Home Equity Line of Credit (HELOC) as an emergency fund? Yes. But to be a true emergency fund you’ll need to not use it until absolutely necessary. Don’t let the line of credit tempt you to use it to buy a fancy new tv or a new couch for example. That’s not a true emergency. Getting laid off from your job and needing to put food on the table is a true emergency. Or making car payments after losing a job so that you can continue to look for a job is a good reason to use your emergency HELOC.
Click title for link at Bankrate.com where they answer many questions about HELOCs. Of course the time to get a HELOC is before you are laid off. They won’t give you one if you are unemployed. If you lose your job and already have an open line of credit they won’t take it away. So act soon to secure this back up plan.