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.