Timeshare debt can be a real pain, and it can cause you to lose money if you don’t handle it correctly. The best way to avoid this is to research your options before you make a purchase, and take your time before making a decision.
Lending options
There are several different types of loans you can use to finance your timeshare. Some of these are offered by the lender your timeshare salesperson recommends, while others are from private lenders. The latter can offer lower interest rates and more flexible terms than those offered by the recommended lender, but you should be sure to shop around before choosing one.
Developer Loans
Timeshare developers have an incentive to provide you with a loan on the spot, so they may be more likely to give you approval and close the deal quickly. However, these loans can come with high interest rates, especially if you have poor credit. It’s also important to understand that the timeshare will be deeded, which means it will go through foreclosure if you default on your payments.
Home Equity Loans
This type of financing can be helpful for people who are looking to get a large amount of money at a low interest rate. It is secured by the equity in your primary home, so your lender will usually have a higher loan limit and more favorable repayment terms than other types of loans.
Personal Loans
If you have good or excellent credit, a personal loan could be the right option for you. These unsecured loans are often available at a lower interest rate than the rates you would receive from a developer, so they can help you save money over the long term.
Other loans to consider are HELOCs and home equity loans. These types of loans use your own home as collateral, so they can be more attractive than other kinds of mortgages, but they typically require a larger down payment.
A HELOC or home equity loan can be a great option for borrowers with good or excellent credit who have built up some equity in their primary home. These loans often offer a larger loan limit and more favorable repayment terms than other kinds of loans, but they can also be difficult to qualify for if you have bad credit.
Refinancing Your Timeshare Debt
If your payments are too high, refinancing or switching to a lower interest rate could help you lower your overall monthly expenses. Refinancing a loan can also be a good option for those who are at risk of foreclosure because their current loan is too expensive.
The best way to avoid this is to pay your timeshare maintenance fees on time every month. This will prevent any late fees from going to collections and will keep you from losing your property.
Your rescission period can vary from state to state, but it typically lasts between three and 15 days. If you choose to rescind the sale within this time, you can refund your purchase and void any contracts you signed.