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Timeshare Refinancing: Is the Grass Greener at Your Bank?

Kids window shopping - Timeshare Refinancing


Timeshare Refinancing. If you've already purchased a timeshare and you took the timeshare company's financing, it's not too late to shop for a better rate.

Review your contract. You should have the ability to pay it off at any time with no prepayment penalty.

In the odd case that you do have a prepayment penalty (shame on your timeshare company!), still shop for a better interest rate, do the math and see if you still wouldn't save money in the long run.

Because timeshare companies finance anyone who walks through the door, their interest rates are usually pretty high.

It's another huge source of income for them, too! Financing timeshares is a service they provide to make things convenient. They're in business, so of course, they're going to make a profit on it!

You do have other options, though, as long as you can pay off their financing with no prepayment penalty. Evaluate your sources of credit.

Do you have an unsecured line of credit, for instance, with an interest rate that is significantly lower than the timeshare company's rate?

For example, a lot of the timeshare companies are charging 14% to 15% interest. Most bank's unsecured lines of credit offer interest rates of anywhere from 6% to 10%, depending on your credit.

Refinancing of vacation timeshares in order to save significant dollars on interest is a good move and your line of credit would work well for this purpose.

Timeshare Refinancing

Personally, from a financial planning point of view, I recommend unsecured lines of credit rather than equity lines of credit attached to your home for something like this.

I'm not a big fan of equity lines of credit period, if you can open an unsecured line of credit instead, with the obvious reason being why tie-up your home value anymore than you have to?

When people move from house to house so much these days, it's better to keep your loan to value ratio as nimble as possible to allow you easier mobility.

Of course, you also need to have a line of credit with a sufficient credit limit to do the timeshare refinancing.

If you don't and can't yet qualify, bide your time, pay your payments and build your credit until you can qualify.

If timeshare refinancing isn't an option for you for whatever reason, another way you can save a significant amount of interest is to make extra payments.

For instance, if you took the company financing for 120 months on $22,500, and let's say your payments were $350. and you added $50 per month, you would pay it off 2 years and 3 months sooner!

I don't recommend refinancing of vacation timeshares through the internet. Too many scams! Stick with what you know, stick with where you have an existing relationship.

If you already have an unsecured line of credit with your bank, you won't pay a commission, financing fee or points. If you refinance with someone on the internet, I can assure you that you will pay, on top of not knowing who these people are!

Timeshare refinancing should be an easy thing to do, and offers you yet another way to save money on your first class dirt cheap vacations!

Timeshare Refinancing

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