Purchasing ownership in a vacation resort can be a scary proposition unless you look at options for refinancing your timeshare. Traditional loans for financing a timeshare usually tend to be anywhere from 14 to 20 percent. This can mean that you end up paying large monthly payments for several years. Refinancing can give you better interest rates, which will lower your payments, and make the pay off much less than it would be with traditional financing. Here are a few options for refinancing your timeshare.
1. Normal Bank Loan
Buying timeshares is a little like buying a physical property. You must finance the purchase if you do not have the $20,000 in cash. This financing is either done through the resort themselves, or with a mortgage company. Since the finance charges through these companies are higher than what you will find at a regular bank, this makes a great option. Refinancing through your local bank, or by shopping around for a different mortgage company can save you thousands in interest fees. You will need to have very good credit in order to ensure that a bank, or a credit union, will work with you in refinancing your timeshare.
2. Online Financing Company
There are many different online companies that specialize in refinancing property loans, auto loans, and a timeshare loan. Their rates are very competitive, being roughly 10 percent lower than the rates you would receive through the resort financing. A simple search of Google will give you plenty of results to look at.
3. Use Credit Cards
Another way to refinance that timeshare purchase is to use a lower interest rate credit card. One the face of it you might think that this is not going to be a good idea. However, when you look at the numbers, you can begin to see the how it will be beneficial. If you are paying over 17 percent on your timeshare loan, and your credit card rate is lower by several points (5 to 10), then you will actually be paying less. Of course, to make sure this actually saves you money, you can pay more than the minimum amount on your credit card bill.
4. Home Equity Loan
Some of the local banks will not see a timeshare as something with a lot of resale value so will not be willing to do a timeshare refinance. However, you may be able to secure a means of refinancing your timeshare through a home equity loan. This way, the loan is secured by your home instead of the timeshare itself. This way you get a lower payment and less interest.
5. Use 401K
If you have a 401k program at your place of employment, you can always take out a loan against what you have paid in to refinance your timeshare. This is only a good option if you only have a few thousand dollars left on your timeshare loan. Any very large amounts will be a very risky venture that has a direct affect on your retirement. However, if you can remove a few thousand dollars to pay off the timeshare unit, and then possibly resell it, you will make money in the process.