DVC Interest Rate

[jbarteau]

Hi everyone,

My wife and I have been DVC members for the last 2 years with 180 points and financed thought DVC at 10%. Has anyone else found a better interest rate through a credit union or bank or any other creative way without paying in full.


Thank you.

 

[Pioneer Hall]

I didn't finance, but when I was reading before my purchase people mentioned home equity lines of credit. Those rates through a bank would likely be better than the rate Disney is offering.

 

[tjkraz]

Yeah, home equity loan is the most popular alternative and rates are usually much lower. I haven't followed that market for a few years but they had been running 3-5%.

Just be aware that you're literally putting your home at risk for the DVC contract with a home equity loan. If you get into a pinch on a loan through DVC, worst they can do is foreclose on the DVC points. If you can't make payments on the home equity loan, the bank can foreclose on your house.

Other people have used low interest credit card offers. In years past credit card companies would extend offers like 2-3% interest for the life of the purchase. Those rates could be maintained until the purchase was paid off.

But these days most credit card offers seem to have time limits attached to them. It might be 2% for a period of 18-24 months, but then the standard rate kicks-in. So take into consideration how quickly you plan to pay off.

Also most of these offers stipulate that payments will go toward the lowest rate first. If you continue to use the card, you could stack-up hundreds or thousands of dollars worth of purchases at 14% and up while the DVC is being paid off.

Those are the only real alternatives available. If you tell a bank you want a loan to finance a timeshare, most will be very reluctant to help. Timeshares are notorious for losing a great deal of their value immediately after purchase. DVC is better than most in this regard but banks don't really follow timeshare markets closely enough to make that determination. Best you'll usually get from a local bank is a signature loan with a rate comparable to the DVC loan. And you any tax benefits with such a loan.

 

[DougK]

Yeah, home equity loan is the most popular alternative and rates are usually much lower. I haven't followed that market for a few years but they had been running 3-5%.

Just be aware that you're literally putting your home at risk for the DVC contract with a home equity loan. If you get into a pinch on a loan through DVC, worst they can do is foreclose on the DVC points. If you can't make payments on the home equity loan, the bank can foreclose on your house.

Other people have used low interest credit card offers. In years past credit card companies would extend offers like 2-3% interest for the life of the purchase. Those rates could be maintained until the purchase was paid off.

But these days most credit card offers seem to have time limits attached to them. It might be 2% for a period of 18-24 months, but then the standard rate kicks-in. So take into consideration how quickly you plan to pay off.

Also most of these offers stipulate that payments will go toward the lowest rate first. If you continue to use the card, you could stack-up hundreds or thousands of dollars worth of purchases at 14% and up while the DVC is being paid off.

Those are the only real alternatives available. If you tell a bank you want a loan to finance a timeshare, most will be very reluctant to help. Timeshares are notorious for losing a great deal of their value immediately after purchase. DVC is better than most in this regard but banks don't really follow timeshare markets closely enough to make that determination. Best you'll usually get from a local bank is a signature loan with a rate comparable to the DVC loan. And you any tax benefits with such a loan.

Actually this has now changed, any payment over your minimum goes to the highest rate balances first by law. It was part of the credit card reforms enacted a year or two ago. Lots of bad came from those reforms because the credit card issuers simply looked for other ways to make up their lost revenues but this was actually one of the good things. Of course this still does not stop you from running up high balances at 14% (or more) but at least you can pay them down quicker than before, if you have the money. But then again if we all had the money we wouldn't need the credit cards would we?

 

[BeachClubNut]

Hi everyone,

My wife and I have been DVC members for the last 2 years with 180 points and financed thought DVC at 10%. Has anyone else found a better interest rate through a credit union or bank or any other creative way without paying in full.


Thank you.

I enquired about financing with several banks, they were reluctant as they first stated how Timeshares lose there value rapidly, one other sId since Disney has first rights that they wouldnt touch it either.