Timeshares can offer a great way to take vacations each year without having to buy a second home. However, they are not without cost. Timeshare companies often charge high fees to maintain the property and sell it at the end of the contract, which can lead to a large amount of debt that can be difficult to pay off.
One option to avoid this debt is to stop paying for the timeshare, which will force the resort developer to either evict you or rescind ownership of the property. This is a risky strategy, and should be considered as a last resort. However, many people find that it is easier than they expected to stop making payments.
A credit card is another option for paying off a timeshare loan, but it is important to choose a credit card with a high limit and low interest rate, which can help you save money in the long run. Another possibility is to borrow from your 401(k) plan, but this will reduce the amount of money invested in your retirement account and may be taxed.
If you have built up enough equity in your home, you could also use a home equity loan to refinance a timeshare loan. However, this option is only a good choice if you are planning to spend the money on improvements that will increase the value of your home. Otherwise, you could face having to sell your house if you default on your loan payments.
Another option to consider is a personal loan from an online lender, such as SoFi. These loans generally have lower interest rates than those offered by a timeshare’s designated lender, and you can typically qualify for them with a credit score of at least 660. In addition, since personal loans are unsecured, your assets will not be at risk of being seized in the event of a default.
If your credit score has improved since you first purchased your timeshare, you may be able to refinance the loan and lower your monthly payments. However, it is important to keep in mind that refinancing a timeshare will likely extend your loan term by several years. This can be problematic because most timeshare companies make it impossible to exit the property once you have paid off your loan.
If all else fails, you can always try to sell your timeshare, but this is a risky option that requires a significant investment of both time and money. Alternatively, you can also work with an experienced timeshare company that can help you negotiate with the resort developers to get out of your contract. However, it is essential to understand that most companies will only negotiate if they believe that you can afford the payments and that you are willing to wait to exit your timeshare. For this reason, it is crucial to research the companies you are considering working with before you sign anything. You can start by reading reviews of various companies.