The average sales price for a timeshare in the US is $23,160, according to the most recent data by the American Resort Development Association (ARDA). This amount doesn’t include the annual maintenance fees, which can increase over time, and average $1,480 per weekly interval. As a timeshare owner, you’re responsible for paying the fee every year, regardless of whether you stay at the timeshare or not.
If your timeshare isn’t working out, or it’s simply too expensive now, refinancing could be an option.
You may want to consider refinancing your timeshare loan or paying it off with another type of loan if you’re experiencing any of these scenarios:
It may be better to keep the timeshare as-is if you’re in one or more of these situations:
The steps you take to refinance your timeshare depend on the method. Refinancing is using another loan to pay off an existing loan. However, since there’s no equity in timeshares, the refinancing process is a little different.
Keep in mind that some of these options can be risky and could lead you into even more debt if you’re not careful.
Most banks won’t refinance a timeshare mortgage because the resale value is low. However, some lenders specialize in timeshare refinancing and can offer you a lower payment.
For example, LightStream — a division of Truist Bank — offers timeshare refinancing loans to US citizens with good to excellent credit. While interest rates vary depending on your exact qualifications, the starting rate for refinancing with LightStream is 8.24%. Plus, it doesn’t charge any fees, and you can apply online and potentially receive your funds the same day.
You may also want to compare other online lenders for timeshares. They can typically offer competitive rates since they don’t operate physical branches.
If you’ve built enough equity in your primary home — typically 20% or more — you may qualify for a home equity loan or a home equity line of credit (HELOC) at a significantly lower interest rate than you’re paying now. Once approved, you can use the loan proceeds to pay off your higher-rate, developer-financed loan.
If you have a solid credit score, you may qualify for an unsecured personal loan that can be used to pay off your developer-financed loan at a lower rate — usually around 8% to 12% with good credit. While rates are typically higher than home equity financing, they’re likely lower than the rates offered by timeshare agents.
Use our table to compare personal loan providers’ rates and loan amount options side by side.
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If you have a high credit card limit with low or no interest for a promotional period, you could potentially use it to pay off your timeshare. But be aware: This can be risky. When the low intro rate expires, you’ll be hit with high rates. And one late or missed payment could lead to an interest rate hike overnight.
Another option is to borrow against your 401(k) retirement savings. The interest rates for 401(k) loans aren’t based on your credit history, and you can repay the loan over a number of years. But you could jeopardize your future retirement or face penalties if you don’t pay the loan back within five years.
Most borrowers refinance to get a lower interest rate to save long-term or seek a reduced rate to get a lower monthly payment (or both). And lowering your interest rate on a loan could save you thousands of dollars in the long run.
For example, let’s say you have a 15% interest rate on a $20,000 five-year loan (most timeshares have a term of around five to ten years). That’s a monthly payment of about $476 and around $8,570 in total interest charges over the loan term.
If you were to lower the rate on that loan to 8%, that would lower your payment to about $406 and reduce your total interest charges to around $4,336. That’s a total savings of roughly $4,235 over the course of the loan — and a $70 cheaper monthly payment.
Use our loan repayment calculator to compare monthly timeshare refinance payments and the total cost of the loan based on different rates and loan terms.
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If you don’t want your timeshare anymore but refinancing doesn’t seem to fit your situation, your options may be:
Timeshares are tricky, and unlike most real estate purchases, they don’t build equity. If your rates are sky-high, you could refinance at a better rate with a specialized lender, home equity loan, personal loan or credit card.
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