Timeshares can offer a convenient and affordable way to enjoy a vacation spot year after year. However, if you’re not careful, you could end up with a timeshare debt that you can’t pay off. Timeshare debt is a common issue that affects many consumers. If you’re struggling with a timeshare loan, there are a few options that can help you overcome your debt.
Timeshare debt is an unsecured loan used to buy a fractional ownership interest in a vacation property. In the USA, a timeshare loan can be in the form of an interest in real property (such as a deed) or a right-to-use purchase contract. Timeshare loans typically have a fixed interest rate and a repayment schedule. Most lenders do not require any collateral to secure a timeshare loan, but they can require a credit check as part of the application process.
Unlike a mortgage, a timeshare can’t be sold or transferred. If you default on your timeshare loan, the resort will report your debt to the credit bureaus. This can impact your credit score negatively and prevent you from getting future financing. The impact to your credit will depend on how much is owed and whether or not you’ve made previous payments.
If you default on a timeshare loan, the developer may hire a third-party collection agency to attempt to collect the overdue payment. This can result in negative entries on your credit report and harassing phone calls or letters demanding payment. The company may also choose to sue for the past-due balance in civil court. If successful, the court can order that your wages be garnished or your bank accounts levied to get your money.
While it’s not always possible to sell a timeshare, some companies have found success in the resale market. However, resale values rarely come close to the original purchase price of the timeshare. Additionally, resale companies often charge high listing fees and commissions. As a result, resale companies often struggle to make a profit.
One option to consider if you’re struggling with a timeshare debt is to refinance the loan. Many lenders, including Figure, offer personal loans and home equity lines of credit that can be used to finance a timeshare. These loans have competitive interest rates and borrower-friendly repayment terms, so they can often be a better alternative to a timeshare loan from the developer.
If you’re looking for a way to escape your timeshare, you should explore all the options available. A reputable timeshare exit company, like EZ Exit Now, can walk you through different scenarios and outcomes to help you decide what’s best for you and your family. They’ll even help you understand how a bankruptcy filing will impact your timeshare loan and other debts. To learn more, visit EZ Exit Now today.