Financing/payment questions

[ClaraOswald]

It's my understanding that if you finance a resale purchase, the interest rates are pretty high.

This is going to sound dumb so just bear with me. I've only ever had a car loan and a mortgage so not sure how other types of loans work.

If you finance, do you have to pick a specific amount of years on the loan and stick to it? Or can you pay off quickly so you end up paying less in interest?

When you make a payment, does it need to be directly from a bank account and not a credit card?

I know this sounds dumb but I'm basically just trying to figure out if there's a way to pay for a resale contract in just a few large chunks of payments...basically to pay minimal interest rates....and to avoid having to deal with money wire transfers at the bank.

Again, I'm sure this all sounds dumb but I would legit do something like this if it meant avoiding the embarrassment of having to explain a timeshare purchase to a judgmental bank person. Ha!

 

[jcolvin5]

Most of these resale companies have a lender attached or is somehow connected to their process. Monera Financial https://monerafinancial.com/ works with several of the DVC resale companies, but there are others out there. I have used Monera Financial and just sucked up the high interest rates for a few months and paid it off.

Maybe not all lenders, but MOST lenders do not have a prepayment penalty. Meaning, you can pay it back as quickly as you want/can.

 

[davidhr]

It depends on the loan. When you take the loan it’s for a set number of years, that’s how they calculate your monthly payments.

If there’s no prepayment penalty, you can pay it whenever you want. Not familiar with the resale financing companies so I can’t speak about those.

Extremely rare for a company to allow credit card payments, so it’s from a bank account.

Coincidentally, Disney allows extra payments from credit cards (but not the monthly payment).

 

[Sandisw]

It depends on the company ,but u have used Lightstream for short term financing. Set it up for three years, but always paid it off within a few months as it was used to bridge between buying and selling resale contracts.


https://www.lightstream.com/

 

[kanerf]

The timeshare loan interest rates are around 16% right now. Not great, but consider that the average credit card is over 20%. If you take out a loan, you can pay a little extra each month and pay it off sooner.

 

[AstroBlasters]

It's my understanding that if you finance a resale purchase, the interest rates are pretty high.

This is going to sound dumb so just bear with me. I've only ever had a car loan and a mortgage so not sure how other types of loans work.

If you finance, do you have to pick a specific amount of years on the loan and stick to it? Or can you pay off quickly so you end up paying less in interest?

When you make a payment, does it need to be directly from a bank account and not a credit card?

I know this sounds dumb but I'm basically just trying to figure out if there's a way to pay for a resale contract in just a few large chunks of payments...basically to pay minimal interest rates....and to avoid having to deal with money wire transfers at the bank.

Again, I'm sure this all sounds dumb but I would legit do something like this if it meant avoiding the embarrassment of having to explain a timeshare purchase to a judgmental bank person. Ha!

Vacation Club Loans www.vacationclubloans.com is currently at around 11% ish for a 10-year with no pre-payment penalty after 90-days. I’m sure you could ask them about various rates at different terms.

Many CPAs will say the interest is tax deductible because it is in a mortgage and non an unsecured personal line of credit. YMMV

I tend to get share payouts in large chunks and use these things to float money between the payouts and pay them off pretty quickly….so no judgement on financing here.

 

[ClaraOswald]

So if I find a contract I like that is around $20,000 (just a random number)....I would put down however much they allow on a credit card....probably $5000. Then finance the rest, so $15,000. For 90 days, I'd have to pay the set monthly payment with interest. Then after 90 days, I could essentially just pay off the rest in a couple months if I wanted?

 

[Sandisw]

So if I find a contract I like that is around $20,000 (just a random number)....I would put down however much they allow on a credit card....probably $5000. Then finance the rest, so $15,000. For 90 days, I'd have to pay the set monthly payment with interest. Then after 90 days, I could essentially just pay off the rest in a couple months if I wanted?

That is how mine have worked!

 

[ClaraOswald]

I honestly don't understand how they calculate the interest. So if you had a $15,000 loan at 11% interest rate...how much in interest would you be paying over, let's say, 6 months?

I am not a math person at all.

 

[DonMacGregor]

Vacation Club Loans www.vacationclubloans.com is currently at around 11% ish for a 10-year with no pre-payment penalty after 90-days. I’m sure you could ask them about various rates at different terms.

Yup, and that's what DVC is charging right now as well (11%).

 

[jcolvin5]

So if I find a contract I like that is around $20,000 (just a random number)....I would put down however much they allow on a credit card....probably $5000. Then finance the rest, so $15,000. For 90 days, I'd have to pay the set monthly payment with interest. Then after 90 days, I could essentially just pay off the rest in a couple months if I wanted?

Correct

 

[Sandisw]

I honestly don't understand how they calculate the interest. So if you had a $15,000 loan at 11% interest rate...how many interest would you be paying over, let's say, 6 months?

I am not a math person at all.

I’m doing only Simple math here....$15000 x 11% is $1650 for the year, which is about $137.50 a month....so, if you paid it off in 90 days, your interest would amount to approximately, $413.

 

[Shoktherapy]

So if I find a contract I like that is around $20,000 (just a random number)....I would put down however much they allow on a credit card....probably $5000. Then finance the rest, so $15,000. For 90 days, I'd have to pay the set monthly payment with interest. Then after 90 days, I could essentially just pay off the rest in a couple months if I wanted?

This is how I do my contracts. I have several stock options that don't vest until January of each year. I put down my 10% plus closing cost, make the payments for at least 90 days then pay off the loan when my stock options vest.

 

[bama314]

I honestly don't understand how they calculate the interest. So if you had a $15,000 loan at 11% interest rate...how much in interest would you be paying over, let's say, 6 months?

I am not a math person at all.

Most loans work like this:
Interest charged per month = APR/12 multiplied by the outstanding balance.

For example:

Annual Percentage Rate = 11%
Divide that number by 12 to get the Monthly Percentage Rate = 11%/12 = 0.917% = 0.00917 (convert percent to decimal)

Outstanding balance on the loan = $15,000
Interest charged in month 1 = $15,000 * 0.00917 = $137.55

Now, if in month 2, you make a large payment and the outstanding balance is reduced to $10,000, the interest charged in month 2 is:
Interest charged in month 2 = $10,000 * 0.00917 = $91.70

 

[CarolynFH]

It took me a while, but I finally figure out how to set up an amortization table in Excel. It's very helpful! I think you can find them online too, via a search.

 

[AstroBlasters]

It took me a while, but I finally figure out how to set up an amortization table in Excel. It's very helpful! I think you can find them online too, via a search.

Just go to and bankrate.com and use their tools….