Timeshare debt is a common problem that can affect people who own vacation properties. In most cases, these owners are unable to keep up with their monthly payments and annual maintenance fees and end up defaulting on their loans. As a result, timeshare resorts lose millions of dollars each year in delinquent accounts.
Buying a timeshare can be an exciting experience, but it’s important to remember that buying a timeshare is just like any other real estate transaction. You need to research your loan options and make sure that you can afford to pay the loan back over time.
When it comes to timeshare financing, you have a few different options. You can choose to take out a loan through the developer or a third-party lender, or you can use a personal loan.
The loan you choose will determine the interest rate and other fees you’ll pay over time. You’ll want to choose a lender that offers the best loan terms and lowest interest rates for your situation.
If you’re a homeowner with a good credit score, you may be able to obtain a home equity loan or HELOC to finance your timeshare purchase. A HELOC will be secured by the equity in your primary home, so you can often get a larger loan amount than with a traditional mortgage and lower interest rates.
You can also consider a private timeshare loan, which is a type of unsecured personal loan available from banks and online lenders. These loans generally offer lower interest rates than those offered by the developers, and they usually have flexible repayment terms.
One thing to remember, however, is that these types of loans typically have higher credit score requirements than other types of unsecured loans. You’ll need to be able to demonstrate that you have a reliable income and enough assets to cover the loan.
Another option is to refinance your current timeshare loan to get a better interest rate. This can save you money over time, but it can also be more expensive in the long run because you’ll be paying interest for longer.
In addition, if you’re struggling to make your timeshare payments, you should be aware that the resort company may start sending you letters and calling you to demand payment or sue you for the past-due balance in civil court. This can be a very frustrating and costly process.
The company may report your past-due balance to the credit reporting agencies and your credit score will likely go down. If you can’t afford the payments, you should try to sell your timeshare, donate it or rent it out until you can pay it off.
If you can’t pay your timeshare payments, contact the resort company immediately and find out what options are available for you to avoid losing your vacation property. In some cases, you can negotiate with the company to sell the property for a small amount or donate it to a charity.