Timeshares can be great, giving you a vacation home away from home year after year. But many people buy these properties with financing from the developer, and the interest rates can be high. One option for lowering your rates is refinancing to a personal loan, which can offer much cheaper rates. However, it’s important to know all of your options before deciding to make this move.
When you attend a timeshare sales presentation, the resort developers often have a lender they work with to offer financing on the spot. The terms of this financing vary, depending on your unique situation, including your credit score and family income. You can also get private loans to finance a timeshare, from lenders that are not associated with the developer. These private loans tend to have lower rates and more flexible terms.
If you’re looking to buy a timeshare, you can start by searching for lenders and comparing your options. Look at their rates, terms and tax advantages. You can also find out whether you’ll be able to easily get pre-approved for the loan, making your shopping process easier.
You can find a number of online lenders that offer personal loans and home equity lines of credit (HELOCs) that can be used to buy a timeshare. These lenders have low minimum credit scores and fast approval processes. Some, such as Figure, even offer an easy online application and funding process. Other lenders, like LightStream and Upgrade, require a higher credit score to qualify.
Another way to purchase a timeshare is through share deeded ownership. With this type of ownership, you hold a deed to a fractional piece of the property, typically for just a week per year. You can use this property for vacations as long as you want, but can also rent it out to others or sell your ownership.
If you bought your timeshare with a lender connected to the developer, you can refinance that loan to a personal loan or a HELOC to lower your rate and monthly payments. Refinancing is not always a good idea, but it’s worth considering if your rate is too high or you need more flexible repayment terms.
Before you refinance, it’s important to make sure you have the right information about your timeshare. You should be aware of the fees and maintenance costs associated with your timeshare, as well as any restrictions on your usage. It’s also essential to understand the value of your timeshare, and how it compares to similar vacation properties in the area.
Refinancing a timeshare loan may help you reduce your payment amount, but it’s important to be realistic about your goals. Refinancing can be expensive, especially if you’re switching to a longer loan term. And if you don’t want to keep your timeshare, it can be difficult to get rid of. Ultimately, you may be better off selling your timeshare, or at least transferring it to someone else.