Timeshares are notorious for causing buyer’s remorse, with high upfront costs and annual fees making many owners wish they hadn’t purchased the property. In fact, a study by Edelman Financial Engines found that timeshares were one of the top five purchases consumers regretted most. A key cause of this regret is misjudging the total cost. When consumers buy a timeshare, they often look only at the purchase price and monthly payment and fail to take into account the maintenance fees and other ongoing expenses that come with ownership.
This is a common mistake, and if you’re looking at buying a timeshare, it’s important to do your research and understand all the associated costs before making any final decisions. Many timeshare companies offer financing, and the salesperson may recommend a specific lender they work with. However, these lenders may not always be the best option in terms of rates and repayment terms. It’s best to shop around for personal loans or credit cards that offer low interest rates before you commit to any long-term financing.
If you’re able to secure financing from the company that offers timeshares, you may be tempted to simply sign on the spot because they’ll likely offer convenient terms. But, just as with purchasing a car, you should always do your homework to find the best rates.
In addition to the interest rate you’ll pay, a timeshare loan will also likely have penalties for late payments. If you don’t make your payments, the company can place a lien on your deed or foreclose on your unit. In some cases, this will prevent you from using the unit or renting it out to guests.
It’s important to remember that the value of a timeshare is in use and enjoyment, not as an investment. As a result, a timeshare is unlikely to increase in value, and it can be difficult to sell. A default on a timeshare loan can be very costly, and it can also damage your credit score.
The good news is that you can try to get out of your timeshare debt if it’s not working for you. Depending on the type of timeshare you have and how many unpaid payments are outstanding, you’ll likely need to work directly with the timeshare company to negotiate a settlement. Some companies have buyback programs, but these are at the discretion of the timeshare developer and are not guaranteed.
For borrowers who have already acquired a timeshare and are paying on an unfavorable loan, you can consider refinancing the mortgage. This can help lower the monthly payment and even get you out of a bad debt situation altogether. However, it’s important to keep in mind that refinancing a timeshare debt can be more expensive than other types of refinance loans. This is because a refinance will require you to provide new documentation, including your income and assets. Therefore, it’s crucial to consult with a specialist before you try to refinance your timeshare.