Timeshare debt is a common problem for owners who have purchased timeshares and are struggling to make monthly payments. Depending on the type of timeshare, this debt can be very difficult to pay off, and late payments can lead to collections notices, levies or even foreclosures.
The good news is that there are a few options for paying off your timeshare debt. These include a personal loan, a home equity loan and a credit card that offers rewards points for the purchase of timeshares.
These loans are typically unsecured and should have lower interest rates than timeshare mortgages, but be sure to check with your local credit union or bank for the best rate before making a decision. If your goal is to get out of timeshare debt as quickly as possible, consider a personal loan or home equity loan.
Personal Loans
If you have strong credit and are looking for a better interest rate than what a timeshare lender can offer, a personal loan may be the right option. These loans often have a lower interest rate than timeshare mortgages, and they may also have better repayment terms.
Home Equity Loans
If your credit score is excellent, you can use the equity in your home to pay off a timeshare debt. This loan is a good option if you have low monthly payments, because you are using the equity in your home as security. However, this can be a risky move if you are struggling with your finances or have already had trouble repaying your mortgage in the past.
Credit cards can be another option, especially if you are able to get a high credit limit. You can use these cards to earn rewards points for the purchase of timeshares, but you should always be aware of any credit card terms and conditions.
Timeshare Loans
If you need financing to purchase a timeshare, your timeshare salesperson can recommend lenders that specialize in vacation ownership. These lenders are willing to work with you and can provide quick approvals.
Usually, they will offer a timeshare-specific loan, but some timeshare resorts also have a general timeshare lending program that works with all types of properties. These loans are not as popular, and they may be a bit more expensive than other types of timeshare loans.
Developer Loans
Timeshare developers have an incentive to offer fast, simple financing options on the spot. These lenders can help you close the deal on the spot, and they may be able to lock in certain incentives.
The downside to these loans is that they can have very high interest rates, which will eat up your savings if you don’t pay them off as quickly as possible. They may also charge additional fees for a variety of services, such as processing the loan.
ARDA reports that the average interest rate for a timeshare loan is 14%, but this can vary greatly from person to person. You can find out your interest rate for free by joining MoneyTips.