How to Finance Timeshares

When you make the decision to purchase a timeshare you may decide to finance your purchase. It is wise to enter into a timeshare purchase armed with as much information as possible to avoid the possible pitfalls you can encounter when financing timeshares.

The problem that most people face when financing timeshares is that timeshares do not qualify for a conventional mortgages. Contrary to what timeshare salespeople will tell you, timeshare units typically have an extremely poor resale value. Because of this, most banks do not like to finance timeshares, leaving buyers to turn to other means of financing their timeshare purchases.

Difficulty:

Moderately Easy

Instructions

1. Try not to be pressured into your purchase by hard-sell timeshare salespeople. They will often try to pressure you into buying right then and there by using 'act now' bonus offers. They try to lead you to believe that the bonus offer will not be available any other time. Often, timeshare incentive 'gifts' are things that have very little value.

   You should never buy something just because you are being pressured. Buying a timeshare is like any other investment, and it is a decision that you shouldn't enter into lightly. Some of the hard-sell timeshare sellers also offer financing, but is it really a good deal? Before financing timeshares through a high-pressure seller, be sure to check the terms of the contract to ensure that you are not going to end up paying much more for your timeshare than you originally thought.

2. The cost of the loan is one factor that many people overlook when financing timeshares. Timeshare sellers typically offer 'easy' on the spot financing while trying to distract you from the fact that the rate of interest for financing timeshares through them is astronomically high.

   The interest rate for timeshare financing is usually in the double digits, sometimes reaching rates upward of 20%. Before you sign the contract, you need to calculate how much more you will be paying for your timeshare in the end and decide if you think it is still worth it.

3. Financing timeshares through a company whose sole purpose is to sell timeshares is not your only option. While there are hordes of Internet companies offering to finance timeshares, keep in mind that the Internet is also home to many scams, so exercise extreme caution before filling out any online applications with your personal information. If you choose to finance timeshares through an Internet company, be sure to investigate the company thoroughly first.

4. You may also want to consider a home equity loan to finance your timeshare. Banks and mortgage companies usually have no problem giving loans based on the equity in your home. It may be a good way to pay for your timeshare outright to avoid outrageous finance charges. The interest that you pay on a home equity loan is usually slightly higher than that of a conventional mortgage, but is still considerably less than the amount you would pay if you financed the purchase through a timeshare seller.

5. You may be wondering what you can do if you don't own a home to use for an equity loan. If you have not purchased a home yet, maybe the question you should be asking is whether you should really be considering a timeshare purchase.

   Financing timeshares at high rates of interest is not a good way to build your credit rating. If improving your credit rating is your goal, perhaps you should be considering a different type of purchase, such as a car. A car is something that has a good resale value and can be used every day of the year.

6. While you're here be sure to check out more great tips and information about timeshares on ehow.