DVC Direct Sale Interest Rates

[ParentsOf4]

For those of you thinking about purchasing points in the Disney Vacation Club (DVC) directly from Disney and were planning to finance, Disney just announced new (mostly higher) interest rates:

"Premium" credit with 20% down: 9.99% (was 9.0%)
"Premium" credit with 10% down: 12.0% (was 11.5%)
"Preferred" credit with 20% down: 12.0% (was 10.5%)
"Preferred" credit with 10% down: 14.5% (unchanged)
"Standard" credit with 20% down: 14.5% (was 12.5%)
"Standard" credit with 10% down: 17.5% (unchanged)
Current DVC member with 20% down: 8.99% (new category)
Current DVC member with 10% down: 11.0% (new category)

Disney is actively marketing Aulani (Hawaii), Animal Kingdom Villas (AKV), and Villas at the Grand Floridian (VGF), with sales at a strongly rumored DVC at the Polynesian (Disney's worst kept secret) likely to start in 2-to-3 years. In addition, all other DVC properties are available for purchase directly from Disney.

Or you could buy resale and save a bundle.

 

[artvandelay]

Those rates are very high, even for Premium Credit. Des DVC do they're own financing or do they have a partnership with another company (eg Wells Fargo, GMAC)?

 

[GoofGoof]

Those rates are very high, even for Premium Credit. Des DVC do they're own financing or do they have a partnership with another company (eg Wells Fargo, GMAC)?

As far as I know they still sell the loans to an investment bank. A few years back Disney had a deal to sell the loans to Citi but I'm not sure if its still in place. Under the terms Disney agreed to back or guarantee a pretty large portion of the loans in order to get the bank to continue to buy the loans after the credit crisis in 2008. I believe what Disney would do is bundle a bunch of loans and sell off the portfolio to the bank. If someone defaulted they would swap out the default loan with a new loan and then Disney would quietly foreclose on the points and resell them. Disney still services the loans so they get a cut of the interest payment but the bulk goes to the bank and it needs to be pretty high to justify the risk.

 

[artvandelay]

As far as I know they still sell the loans to an investment bank. A few years back Disney had a deal to sell the loans to Citi but I'm not sure if its still in place. Under the terms Disney agreed to back or guarantee a pretty large portion of the loans in order to get the bank to continue to buy the loans after the credit crisis in 2008. I believe what Disney would do is bundle a bunch of loans and sell off the portfolio to the bank. If someone defaulted they would swap out the default loan with a new loan and then Disney would quietly foreclose on the points and resell them. Disney still services the loans so they get a cut of the interest payment but the bulk goes to the bank and it needs to be pretty high to justify the risk.

Thank you.