When you refinance your timeshare, you have a few options to consider. These options involve different methods of obtaining the refinancing and varying factors to consider when you decide you want to refinance. Refinancing your timeshare is something you most definitely want to explore if you think you can get a better rate than what you have currently. Chances are that you took financing from the timeshare company itself when you bought a timeshare and therefore, chances are pretty good that you'll get lower rates somewhere else since timeshare companies purposely charge high rates to make a profit. Read the following to gain an understanding of what to do when it's time to refinance a timeshare.
Check Your Credit Score
Having a good credit score is such an important factor when it comes to timeshare refinancing. It is a determining factor in deciding whether you will get the lowest rate for your refinancing and, if not the lowest, then what your actual rate will be. These days, checking your credit score is a breeze and there are many easily accessible organizations and services to aid you.
Evaluate Your Sources of Credit
This can be very helpful to you if you can find sources of credit whose interest rates are significantly lower than the timeshare company's interest rates. A good suggestion is a bank's unsecured line of credit because these offer interest rates that are, traditionally, lower than a timeshare company's. Again, the reason is that timeshare companies purposely charge a high rate of interest to their customers because they want to be able to finance everyone who approaches them. That way, they can make a profit more easily. Finding a source whose rates are lower than a timeshare company's should be easy.
When considering when to refinance your timeshare, sometimes, you'll discover that it just isn't doable for a multitude of reasons, but that still isn't the end of it. Since the goal of refinancing is to save money at the end, you can always choose to just make extra payments instead. Though this may sound counter-intuitive, if you pay off your obligations sooner through extra payments, that will reduce the number of months and possibly years that you will have to pay off at your existing rates.
Exercise Caution in Refinancing
Refinancing's ultimate goal is to save you money by getting lower interest rates for your obligation, so avoid at all costs the mistake of subjecting yourself to more liabilities. For example, avoid borrowing against the equity in your home (assuming you have equity built up there) in order to refinance your timeshare. While certainly an option, too, this route will expose you to more risk and uncertainty as you end up tying up your home value more than you have to. With today's housing crisis already a big burden, it just isn't worth it under today's conditions to risk it with this option.