The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: Eric9064 on September 26, 2016, 11:15:28 AM
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I just found out that my parents have a loan for a timeshare at a very high interest rate. They asked me to look into if it would be possible for them to refinance, but I am having some trouble finding reliable information on the web. Has anyone gone through this process and, if so, can you recommend a lender to use?
Thanks in advance.
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You're looking for an unsecured personal loan. Timeshares don't convey any real property, so there's no collateral for the bank to seize if your parents default. As a result, the rates are going to be much higher than they would be for a collateralized loan, like a traditional mortgage.
It may be easier for them to default on the timeshare now, rather than seeking a loan to pay it off.
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yep as axe said ... if they dont want to default you could use a loan with real collateral behind it like a HELOC or taking out a new loan on a car depending on how much it is.
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There are a few timeshare companies (Hilton Grand Vacations) where the timeshare represents actual real estate, and retain some of their value. Typical timeshare loans are upwards of 10% APR.
Boarder42 has the right idea - get a HELOC on their house at >5% and pay off the 10% loan.
The Timeshare Users Group online discussion forums would probably have more specific answers regarding your parents timeshare company (http://www.tugbbs.com/ (http://www.tugbbs.com/)). Resale value, places to buy/sell/trade timeshares, etc.
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Thanks for the responses and I appreciate the help. My parents do you have a HELOC that they could use to pay-off the timeshare but are hesitant to use it for that purpose. I'll look into other options but using the HELOC may be the best course of action.
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Are they using (and presumably enjoying) the timeshare? If not, maybe they should work on getting rid of it...?
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I second tug as a great resource- unless they are activley usuing the tomesher- it might not even be worth paying it off- maybe the timesshare will accept it back.