What Happens If I Can’t Pay A Timeshare Loan?
Written by: Traver
With the current state of the economy timeshare foreclosures are at an all time high, many timeshare owners who purchased directly from the resort might find themselves facing a tough decision, whether to continue paying their high interest rate timeshare mortgage or to foreclose on the loan. Below we will look at a few different possibilities.
The first option is to simply stop paying the timeshare mortgage; I would never recommend this option. The company that loaned the money to pay for your timeshare will most definitely come after you and any assets that you own. This will also effect your credit negatively the same way foreclosing on a house would. Some timeshare owners might not take into account the consequences of “walking away” from their timeshare loan but it must be viewed the same as any other loan in your name.
Another option is to contact the company that financed the timeshare and see if they would be willing to renegotiate your interest rate to something that fits into your budget. This may be a long shot but if you explain the situation to the mortgage holder, they might make an exception rather than letting you default on the loan. If the timeshare resort holds the mortgage note you can also contact them and ask if they will let you out of your commitment. This is also most likely another long shot, but again some resorts might rather have the timeshare week back as oppose to having your default and trying to get the money from you through a collection agency.
The final option is to refinance your timeshare through an outside source. When you refinance a timeshare through an outside source you can more than likely find a lower rate which will lower the monthly payment for your timeshare loan.
If you are considering purchasing a timeshare, resales are the best way to go. With a timeshare resale in the secondary market you can normally avoid the high interest rates and find a timeshare for your family for around one half to one quarter of the purchasing price directly from the resort. Please let us know if there are any former owners or current owners who have been in this situation and how they were able to remedy the situation.
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