Timeshare loans are a great option for buyers who want to get the most out of their vacation property. But they also come with a number of pitfalls, so it’s important to be aware of them before signing any paperwork.
A timeshare is a way to own a fractional share of real estate in an exclusive resort. Typically, you buy a specific week and a corresponding number of points (usually based on the value of the unit).
The good news is that most timeshare owners find these loans to be convenient, affordable, and easy to work with. The bad news is that they often come with a high interest rate.
To learn more about your options for financing a timeshare, read our guide to timeshare loans.
Home Equity Loans
If you have built up some equity in your primary residence, you may be able to take out a home equity loan to finance your timeshare purchase. These loans are secured by your home, so you’ll likely get a lower interest rate than if you used a personal loan.
Credit Cards
Those who have an excellent credit score can secure a timeshare loan with a credit card. However, it’s best to check your credit before you apply for this type of loan so you know what the interest rate will be.
Another option is to look for a mortgage lender that offers timeshare refinancing. These lenders will work with you to help you find a better deal on your timeshare loan.
One of the biggest benefits of using a timeshare refinance lender is that they can give you better rates than your developer or any other third-party loan provider. LightStream, for example, has timeshare refinancing rates starting at 5.99% and does not charge an origination fee or prepayment penalty.
But remember, the key is to pay off your timeshare as quickly as possible and never let it become delinquent. If you do, the loan company could seize your property and recoup its losses.
The other benefit to refinancing your timeshare loan is that you’ll be able to save money on your monthly payments. This is especially helpful if you’re struggling to keep up with your payments and are looking for ways to reduce your debt.
You can even get a lower rate if you have a history of consistent payments, and this can free up your budget to help you pay off your loan more quickly.
If you have a credit score of 580 to 669, you should have no trouble getting a loan with a personal lender. These lenders consider many factors when determining whether to approve your application.
If you have poor credit, it’s unlikely that you’ll qualify for a loan through your developer or any other bank or non-bank lender. You’ll probably have to turn to a private lender to get the financing you need.