Tips For Consumers Taking Out a Personal Loan to Buy a Timeshare.

Tips For Consumers Taking Out a Personal Loan to Buy a Timeshare.

Taking out a personal loan for a vacation ownership usually seems like a good idea after speaking to timeshare salespeople. Misleading promises during the presentation convince many that they’ve stumbled across a deal of a lifetime. Because of this, thousands of buyers borrow money in order to purchase somewhat of a mirage. Many don’t even realize they’ve made a mistake until it’s too late. Interest, maintenance fees, travel expenses, taxes and other costs can create quite the burden. Not to mention the emotional impact of false promises

The problem is, the perpetual agreement that vacation owners sign is binding. Getting out of the contract is burdensome in itself. That’s why we believe it’s important to help inform consumers before they’re even presented with the opportunity to make a life-altering mistake – like a timeshare purchase. With that being said, a recent article by MSN covered a number of things to look for when taking out a personal loan to buy a timeshare. So, we thought we’d highlight some of their points for you.

First Things First, Analyze Everything.

According to ARDA, the average sales price of a weekly interval is $22,942. But this number is far from finite. Sadly, most buyers aren’t truly aware of the totality of the expense and how much interest adds to it (17-19%). This is often intentionally hidden from them. While a timeshare loan may give you an opportunity to travel places you’ve never been, it can also alter your lifestyle. The key to avoiding a regretful timeshare purchase is simply taking the time to read into every detail before buying. Counting on sales teams to cover all of the bases is wishful thinking.

What Caught Our Attention About the Article.

One of the first things MSN mentioned in their post was the concept of reselling fractional interest. They did a great job of explaining how timeshares actually depreciate. This is why most banks won’t finance them and lending often goes through the developer (or credit card partnership). Nobody is going to take over the outstanding balance of an unwanted timeshare as it is proven that almost never does the collateral (timeshare) hold any value on the secondary market. 

If you’re ignoring interest rates because you think you can rent or sell the property, then really think about what you’re doing. It’s value in the marketplace is far less than what’s still owed on it. A timeshare is not the same as homeownership. The simple fact there’s literally no financial return should deter many from taking out a personal loan to buy a timeshare. Thousands of buyers would avoid remorse if this was fully understood.

Other Tips Regarding Personal Loans For Timeshares. 

MSN’s article also pointed out a number of things to look for in timeshare financing. Like all large purchase loans, the fine print should always be thoroughly inspected. Adding up numbers and doing the math yourself is important. This is the last chance you have to catch something disadvantageous. Since other items have been known to be included in timeshare finance packages, check numerous times if you can. MSN even goes as far as saying, “Don’t allow anyone to strong arm you into opening a credit card.” No matter how good 0% interest sounds, APR can be higher than expected.

There are also alternative ways to take out a personal loan to buy a timeshare. For some, the developer’s option may not make sense but they’re still committed to the purchase. While it’s still important to analyze your intentions, MSN recommends looking into unsecured personal or home equity loans for a solution. Lower interest rates can be expected – but realize a default mortgage can cost you your house. Is that worth it?

The Bottom Line With Loans For Vacation Ownership.

Every day, we speak to dozens of unhappy vacation owners, desperate for relief. Although timeshare sales teams deserve most of the blame, taking the time to review every detail would have saved them a lot of time and money. If you’re considering a purchase of this magnitude – even if you think it’s a limited time offer – please do your homework. There are plenty of publications providing a wealth of timeshare information online. Take advantage of these resources and make a decision that’s best for you.

Timeshare Loans and the Unexpected Reality of Ownership.

Timeshare Loans and the Unexpected Reality of Ownership.

When it comes to most major purchases, borrowing money is a common way to get what you want. The ability to easily do so in today’s culture is the main reason why so many people are in debt. Things that used to be out of reach can be had for “affordable” monthly payments. Since many consumers base decisions like these on how much they make per month, financial setbacks and urgent needs can quickly make a large purchase regrettable. Timeshare loans are no different and it doesn’t take long for buyers to realize they’re in over their head.

Unlike other expensive items with similar price points (car, boat, home renovation, college tuition, etc..), buying a timeshare is usually an impulse decision. When you think about it, this is extremely odd. Most people know little about fractional ownership. In fact, it’s safe to say most of the general public knows more about vehicle features and state colleges than vacation intervals. Consumers spend hours researching vehicles online before even contacting the dealership. Why is it that we’ll spend multiple weekends test driving boats before buying but we’ll sign off on a $20,000 timeshare without much thought?

The answer lies in between the lines of consumer reasoning. With most of these purchases, people know what they want and what to look for. They won’t go to the dealership until they’re ready because the aggressive nature of a car salesman is expected. They want to be prepared so they can call out bluffs while countering intuitively and intelligently. Since the purchase and its value is clearly understood, the desire to enjoy it is already there.


How Consumers Get Stuck in Timeshare Loans.

If you analyze the sale of a timeshare, you’ll realize most people attending presentations are there for the perks. For the most part, they agree to show up because they’ve been incentivized to listen to something they could care less about. They feel the exchange-of-time is worth it because they have no intention or desire to buy. Rarely do they expect to be intrigued. But low and behold, many consumers are dazzled by once-in-a-lifetime opportunities to travel and take out unfavorable timeshare loans to make it happen.

What fails to meet the eye is the simple fact that timeshare presentations, are run by commissioned representatives that make car salesmen look like boy scouts. Since most people don’t anticipate the hard sale, they tend to believe it. Even though pertinent details tend to be left out during the pitch, the strategic excitement and vague possibilities of a new frontier leads consumers to believe they’ve struck gold. But if you’ve bought a timeshare before, you know this is usually short-lived.

Once the reality of the purchase sets in, many come to realize they can’t even book the condo. They figure out the total cost is quite more than they expected and a resale market doesn’t even exist. After seeing the amount of interest that timeshare loans carry, they begin to view the purchase as a burden. All of the jubilee quickly turns bitter and buyers despise what once was seen as a unique opportunity to escape reality in style.


The Psychological Element of the Timeshare Sale.

The timeshare purchase itself is a lot more complex than consumers being in less-than-ideal sales environments with the wrong people. Timeshare companies know how to put people in unknown situations that isolate them, making it easier to persuade. Anyone in the psychology field knows the best way to sell someone on something is to somehow nurture them into believing the decision is theirs. This is exactly what the resort does to close people on timeshare loans.

A dosage of “what ifs” blended with an element of pressure creates a sense of urgency for potential buyers. The perks and capabilities that have yet to be experienced paint a picture of an improved quality of life alongside endless possibilities to create new memories. The idea that the purchase is “affordable” forces them to seriously consider the offer and make a quick decision before it goes away.

Many of our clients talk about the appeal of buying. How they felt like they never went anywhere with their spouse or family. That they barely even went out for dinner, not to mention vacationing anywhere worthwhile. When the purchase was presented in a limited fashion, it encouraged them to take advantage of an ability to spend more time with loved ones and family. Many feel as though the purchase fills a void in their life that they hadn’t previously recognized on their own.


This is why timeshare companies target certain types of households for ownership. They want to pitch people who don’t exactly have the budget to travel lavishly. They want to be able to tell them that they can by persuading them that their dreams are actually within reach. Salesmen are trained to come off as empathetic friends, simply handing out travels deals to help people experience life to the fullest. If consumers knew the real intent behind the sale, they’d never agree. In short, closers reap high commissions.

Unfortunately, deception is a specialty of the greedy. The documentary, Queen of Versailles, shows how timeshare travel is really portrayed by those behind the scenes. Subconsciously, everyone wants to go on vacation, but not everyone can afford it. These corporations know that preying on people that want to travel, but can’t, is a lot easier than pitching those that don’t need a travel bargain. When an opportunity seems too good to be true, lower income households are a lot more prone to say “yes.” Especially when they can borrow money with seemingly “affordable” timeshare loans to experience what higher income families do.

How Misleading Are Timeshare Loans, Exactly?

When consumers make a large purchase, most of them aim to pay it off as quickly as possible. Although debt isn’t being taken as seriously as it should be in the 21st century, most people understand how interest works. But because of the lack of disclosure during the presentation, many timeshare buyers don’t anticipate the purchase costing double or even triple what was presented to them.


In reality, agreeing to buy a $20K timeshare usually ends up costing around $45K over the term of the mortgage. Some of our clients tell us they knew the interest rates were high but they were told they could quickly refinance to lower costs. When they discover this was a lie, they find themselves stuck in a perpetual contract with zero wiggle room. Most refinancing options have certain qualifications that aren’t immediately attainable. Even if buyers restructure down the road, the principal balance remains the same because they’ve been paying off interest the whole time.

Annual fees that come in the form of maintenance and assessment costs also plague buyer’s pocketbooks. Every year, these continue to rise, placing quite the financial burden on buyers. Maintenance fees alone cost $1,200 per year on average. Even when owners pay off timeshare loans or mortgage balances, they’re still obligated to pay these dues every year. You could spend $45K on a 10 year term, and still face a $12K minimum obligation over the next 10 years. 

As you can tell, this amount is a lot more than what the initial sales pitch covered. But it’s not the only financial disadvantage that hinders buyer enjoyment. When the purchase doesn’t live up to expectations, many consumers spend more to make it worthwhile. Upgrades normally come in the form of additional contracts with separate timeshare loans and annual dues. What started off as a $20k borrow over 10 years for $167/month actually ends up being $354/month at 17.9% interest, resulting in a devastating financial blow that can surpass $100k over time.


The Importance of Understanding Timeshare Financing.

Over the next few weeks, we’re going to spend a lot of time focusing on the actualities of borrowing money for vacation ownership. Since many of our clients have experienced quite a bit of hardship, we’ve been able to conceptualize their stories and create valuable content that helps you understand the true expense of fractional ownership. 

Aside from breaking down travel financing in general, we hope to help you grasp the simple fact that a timeshare property is not an asset but a liability. Even when it comes to refinancing, lowering your interest rates isn’t as easy as it’s said to be. Knowing how timeshare lenders work and what to expect out of a mortgage (or a personal line of credit) will help you navigate the industry with confidence. 

At VOC, we know how discouraging the financial burden of a timeshare can be. Timeshare loans are not in the least bit consumer friendly. In addition to all of the other inconveniences buyers experience, the cost is what commonly compels people to get out of timeshare contracts. But you don’t have to feel trapped in your agreement. We hope this article provides you with perspective and helps you make the best decision for you and your family. Sometimes asking the right questions helps you avoid deceit altogether.

If you have any questions about canceling fractional ownership, you can always visit other blogs for more information. If you’re unable to find what you’re looking for, one of our consultants will be more than happy to see how VOC can help. If you’re set on getting rid of the purchase, feel free to proceed with a qualification form below.

Timeshare Taxes and Obligations of Ownership – The Good, Bad and Ugly

Timeshare Taxes and Obligations of Ownership – The Good, Bad and Ugly

Over the years, we’ve spent a lot of time trying to better understand the needs of timeshare owners. Doing so has improved our ability to consult disgruntled owners with different frustrations. It has also allowed us to help potential buyers fully grasp what they can expect after purchasing a timeshare. Labeling failed ownership as an epidemic in our country might be a bold statement, but far too many fractional owners are experiencing buyer’s remorse. No matter what their disappointment entails, a majority of complaints surround a lack of clarity or misleading information during the sales presentation.  

If you’ve ever been to one of these presentations, then you might understand why so many people overlook the details of the contract they’re signing. The giveaways, promises, testimonials and possibilities can easily distract consumers from what they’re really signing up for. Many don’t realize a timeshare contract is eerily similar to a home mortgage. The problem is, contract obligations aren’t at the forefront of timeshare sales strategies.

Learning About Additional Expenses the Hard Way.

Once a timeshare purchase has been finalized, it’s common for new property owners to spend a good amount of their time planning their timeshare vacation instead of revisiting the details of their perpetual agreement. Unfortunately, many learn about the vague obligations of timeshare ownership as they go. While pursuing an explanation (or even some restitution) might seem like a priority, the timeshare company isn’t necessarily required to detail the specifics of your contract for you. What you can expect is a sales pitch to upgrade your experience in order to make your contract revelations worthwhile.

is your timeshare worthwhile or do you need to cancel you agreement for timeshare tax laws

Finding Answers to Timeshare Tax Questions with VOC.

Since the chances of receiving satisfactory answers from the resort are slim to none, we want to make sure you’re able to gain clarity on your current situation. While the realization of annual costs and special assessment fees can be a complete bummer, there is some silver lining when it comes to timeshare taxes. With that being said, let’s take a look at the good, bad and ugly of tax season with a timeshare property.

The Ugly: Taxes on a Delinquent Timeshare.

When fractional owners realize their timeshare agreement isn’t what they expected, their initial gut reaction is to stop paying the resort. Taking a stance and demanding a requital for the inconvenience or misunderstanding is not the best of ideas. Although some smaller operations may be willing to listen and negotiate a resolution, not many timeshare companies are going to conform. In the long run, they know you’ve adhered to a perpetual agreement that locks you in as a fractional owner at their resort. There’s not much you can do or say to relinquish you of your obligation to pay.


Similar to a home mortgage, if a timeshare owner refuses to pay for the property or its included fees then they can face delinquency. The resort is not required to hold your hand during this process and can swiftly move to foreclosure. As you may know, this can drastically impact your finances and credit.

If a foreclosure were to occur, you’ll most certainly need to discuss your timeshare taxes with a certified public accountant (CPA). If you’re wondering where to start, the timeshare company will typically mail a 1099-C form for the “Cancellation of Debt.” It’s the fractional owner’s responsibility to report the occurrence accordingly. Refusing to pay can end up costing an exponential amount of time and money, especially during tax season.

The Bad: Annual Timeshare Taxes on the Property.

Although most fractional owners won’t experience penalties for delinquency, all are subject to pay annual taxes on the timeshare property. Just like personal residences, local governments levy property taxes on timeshares. The tax rate for each property varies, depending on the assessed value of the timeshare. If improvements are made to the resort or the local travel market increases, then tax rates will continue to rise. Some owners are protected from rising costs with a guaranteed fee – but only if it’s a perpetual guarantee.


Having to pay annual timeshare taxes can be surprising when owners were only aware of the monthly mortgage cost. It can also become financially draining when coupled with other unexpected fees that weren’t initially budgeted for. It’s important for potential timeshare owners to understand that their payment obligation will always include the mortgage, maintenance fees, management costs, assessments, homeowner’s insurance and timeshare taxes on the property. Reviewing the contract will help you determine which of these costs are bundled in your agreement or listed as additional expenses.

The Good: Timeshare Tax Deductions or Write-Offs

Although there is some negativity surrounding timeshare taxation, there are also some perks. Every year, most timeshare owners are able to retain a portion of the overall expense by filing appropriate tax deductions. But prior to counting your chickens before they hatch, it’s important to understand not all unexpected expense qualify for a deduction. For example, timeshare closing costs aren’t usually tax deductible. Either way, you should still work with a tax consultant to add expenditures like this to the total cost of your week for timeshare tax purposes.


Similar to homeownership, property taxes can be an easy write-off during tax season. If a timeshare owner pays some of the property tax, they’re able to write it off as an itemized deduction on Schedule A using a 1098 tax form. The IRS gives fractional owners the right to deduct property taxes based on the actual value of the unit. If you plan on taking advantage of this, make sure you itemize the timeshare in order to claim it as a write-off.

If the property taxes aren’t billed to you directly (or explained on annual billing statements), you may not be eligible for a tax write-off. This is normally true when the entire resort has been assessed and billed as one parcel. In other words, timeshare taxes aren’t being assessed against your individually purchased week so you won’t be able to deduct them. The good news is, there isn’t a limit on the number of timeshares you can claim a deduction for. If one or two aren’t eligible, you can still compile the deductions of additional properties on your tax returns.

Aside from property tax, interest paid on a loan used to buy the timeshare usually is deductible. The tax law allows deductions for nearly all interest expenses that an individual pays on a primary home and one other home. This “other home” can be a timeshare or other vacation residence. If you happen to have mortgages on more than two eligible homes, then you can select two you’d like to use as deductible interest. Remember to revise your choices every year.


What Won’t Fly as a Deduction?

While additional fees may seem like obvious write offs, most expenses will remain expensive. Maintenance fees, special assessments, membership fees and taxes used for resort improvements cannot be itemized as deductions. Even exchange fees are treated as personal expenses and not deductible. If you plan on deducting homeowners insurance, then you’re going to need to prove that you’re generating rental income from the property. If you’re unsure of anything, it’s important that you always consult a tax advisor to ensure you’re making claims and filing correctly.

Always Research Major Purchase Decisions

Before you buy a timeshare, you should always thoroughly understand the commitment. Although timeshare ownership can be an amazing experience for everyone involved, the unexpected can hinder vacations for years to come. If you’re tired of paying for something you don’t want, we’d love to talk with you about your options. Otherwise, we hope this article gave you a better understanding for timeshare taxes and the obligations of vacation ownership.

By using our site you agree to the following Terms of Service.