Current DVC Interest Rates?

[Diznut84]

Does anyone know what the current interest rates that are offered by DVC for new purchases?

Thanks!

 

[4mygrls]

I am curious about this too.

 

[browniemtb]

10.75% for EFTs and 11.75% for a statement account. At least thats what it was the last time I heard anything......
Brownie

 

[Duane]

Browniemtb is correct..... We joined about 3 weeks ago and that was the going rate.

Duane

 

[Fsued123]

I agree, we just closed and received the EFT rate.

 

[Diznut84]

Thanks, everyone!

 

[DVC Dude]

10.75% for EFTs and 11.75% for a statement account. At least thats what it was the last time I heard anything......
Brownie

Those rates seem high. Can you use a home equilty line of credit?

 

[weathernlu]

Those rates seem high. Can you use a home equilty line of credit?

Those rates are a little high, but not bad considering they are loaning you that money for the timeshare with no colateral other than the timeshare itself. Not much risk for them, but still.

I have a HELOC and the rate on that thing is all the way up to 7.75% with the interest rate hikes that have been taking place, so the 10.75% isn't outrageous when you consider you aren't putting your home on the line for a timeshare.

I ran around the block on this one, but the answer is of course you can use a HELOC. DVC will not know or care that the money came from a HELOC, they'll get the cash that you get by using your home.

The question is, is it worth it to put your home on the line for a vacation rental? That's your decision, for me it's not.....I'll pay the extra interest.

 

[dumbo71]

The question is, is it worth it to put your home on the line for a vacation rental? That's your decision, for me it's not.....I'll pay the extra interest.

I've got the solution. How about waiting until you have the cash to buy something like a timeshare or other luxury item????

OP, do yourself a favor and DO NOT finance at those rates. Pay cash or wait, you'll thank me later.

If you really want that DVC you'll save up the buy in money before you know it. Maybe a small resale contract with cash until you can afford more might work.

 

[DVC Dude]

I've got the solution. How about waiting until you have the cash to buy something like a timeshare or other luxury item????

OP, do yourself a favor and DO NOT finance at those rates. Pay cash or wait, you'll thank me later.

If you really want that DVC you'll save up the buy in money before you know it. Maybe a small resale contract with cash until you can afford more might work.

That is the single best idea I have ever read on DIS.

 

[keishashadow]

I've got the solution. How about waiting until you have the cash to buy something like a timeshare or other luxury item????

OP, do yourself a favor and DO NOT finance at those rates. Pay cash or wait, you'll thank me later.

If you really want that DVC you'll save up the buy in money before you know it. Maybe a small resale contract with cash until you can afford more might work.

why not run it thru a CC for points/rewards?

does Chase Visa still have a 6 month interest free promo for DVC?

not sure if we'll stick to our cash only strategy once AK/CR is announced though.

 

[hrsmom]

I agree with waiting until you can pay for it in full. If you finance at 10.75% for 10 years the timeshare is costing you A LOT of money. At the very least, if you finance, make sure to pay it off early and save some money on the interest.

 

[tjkraz]

I've got the solution. How about waiting until you have the cash to buy something like a timeshare or other luxury item????

OP, do yourself a favor and DO NOT finance at those rates. Pay cash or wait, you'll thank me later.

I think this helps illustrate how there really is no "one size fits all" approach to DVC.

For instance, let's consider a hard-working family who can safely budget $3000-4000 for a Disney trip per year without having to finance or dig into their savings. Putting that money aside for a DVC purchase would effectively mean no trips for 4-5 years. Over those years, not only does that family lose the benefit of their annual vacation, but they also see DVC (or resale) purchase prices increase as contracts get shorter. Instead of paying $86 per point plus interest for 47 years, they could easily end up paying $100+ per point for 43 years.

Alternatively they could continue to spend their $3000-4000 out of pocket each year, but we all know that will cost a lot more in the long run.

Adding interest to the DVC purchase may stretch the breakeven point from 6-7 years to 9-10 years, but the long-term savings is still substantial.

DVC contracts hold their value nicely on the resale market, making it a fairly low-risk investment. And since the DVC loans have no pre-payment penalty, hopefully many folks will budget themselves to pay off their DVC loan in much less than 10 years.

Financing a DVC purchase shouldn't be a kneejerk reaction after 1 or 2 enjoyable trips without carefully considering the overall financial impact. But, IMO, a blanket policy of "don't buy if you have to finance" is equally flawed.

 

[WendyinNC]

I think this helps illustrate how there really is no "one size fits all" approach to DVC.

For instance, let's consider a hard-working family who can safely budget $3000-4000 for a Disney trip per year without having to finance or dig into their savings. Putting that money aside for a DVC purchase would effectively mean no trips for 4-5 years. Over those years, not only does that family lose the benefit of their annual vacation, but they also see DVC (or resale) purchase prices increase as contracts get shorter. Instead of paying $86 per point plus interest for 47 years, they could easily end up paying $100+ per point for 43 years.

Alternatively they could continue to spend their $3000-4000 out of pocket each year, but we all know that will cost a lot more in the long run.

Adding interest to the DVC purchase may stretch the breakeven point from 6-7 years to 9-10 years, but the long-term savings is still substantial.

DVC contracts hold their value nicely on the resale market, making it a fairly low-risk investment. And since the DVC loans have no pre-payment penalty, hopefully many folks will budget themselves to pay off their DVC loan in much less than 10 years.

Financing a DVC purchase shouldn't be a kneejerk reaction after 1 or 2 enjoyable trips without carefully considering the overall financial impact. But, IMO, a blanket policy of "don't buy if you have to finance" is equally flawed.

I agree. I also believe that it may not be in someone's best interest to pull $15k out of savings to pay cash for DVC. Savings is very hard to replace even for the most diciplined individual. One may be better in the long run by financing and holding onto their other assets, even if they are paying out more interest than they are earning. In the end they will hopefully have the $15+ in the bank and a DVC paid for. I'm very diciplined; however, I feel that if I take the $15k out of savings I may not replace it. If you have an Asset hold onto to it and never let it go unless you are purchasing another Asset that will grow in value over time. I don't view DVC as an asset or investment. So, even though I could pay cash I may decide to finance.

 

[dumbo71]

I think this helps illustrate how there really is no "one size fits all" approach to DVC.

For instance, let's consider a hard-working family who can safely budget $3000-4000 for a Disney trip per year without having to finance or dig into their savings. Putting that money aside for a DVC purchase would effectively mean no trips for 4-5 years. Over those years, not only does that family lose the benefit of their annual vacation, but they also see DVC (or resale) purchase prices increase as contracts get shorter. Instead of paying $86 per point plus interest for 47 years, they could easily end up paying $100+ per point for 43 years.

Alternatively they could continue to spend their $3000-4000 out of pocket each year, but we all know that will cost a lot more in the long run.

Adding interest to the DVC purchase may stretch the breakeven point from 6-7 years to 9-10 years, but the long-term savings is still substantial.

DVC contracts hold their value nicely on the resale market, making it a fairly low-risk investment. And since the DVC loans have no pre-payment penalty, hopefully many folks will budget themselves to pay off their DVC loan in much less than 10 years.

Financing a DVC purchase shouldn't be a kneejerk reaction after 1 or 2 enjoyable trips without carefully considering the overall financial impact. But, IMO, a blanket policy of "don't buy if you have to finance" is equally flawed.

Tkraz,

Overall your post is excellent and hard to disagree with. The part I disagree with is the part about if you wait it will cost you more. That may be the case but it is not always true. The next great promotion is right around the corner if you have the patience and disapline to wait.

Example from my experience. I bought into SSR pre-opening with the $5 per point discount off the $89 pp price. In essence I paid $84 pp. Now fast forward three years to the people who took advantage of the the first F&F deal. They paid almost the same price per point as I did. Also people taking advantage of the current F&F promotion are actually paying less than those who bought a year ago or more. Waiting does NOT always mean paying more.

Financing a luxury purchase is not a wise financial decision. My rule of thumb is the only thing I finance are necessities like a house that give me a write off come tax time. Other than that I pay cash. Sounds unrealistic in todays "buy now, pay later" world but it can be done.

 

[dumbo71]

I agree. I also believe that it may not be in someone's best interest to pull $15k out of savings to pay cash for DVC. Savings is very hard to replace even for the most diciplined individual. One may be better in the long run by financing and holding onto their other assets, even if they are paying out more interest than they are earning. In the end they will hopefully have the $15+ in the bank and a DVC paid for. I'm very diciplined; however, I feel that if I take the $15k out of savings I may not replace it. If you have an Asset hold onto to it and never let it go unless you are purchasing another Asset that will grow in value over time. I don't view DVC as an asset or investment. So, even though I could pay cash I may decide to finance.

Problem with this logic is you are losing money hand over fist. 10.75% interest? Where are you earing that? If you are paying more than you are earning, then you lose.

Also, and this isn't directed at you, the same people asking about financing don't have $5,000 in the bank let alone $15,000 and I see that as a problem.

 

[MILLZ]

Why so angry once again one size doesnt fit all so you have alot of money stuffed away congrats but your philosophy and someone elses may not be the same.

 

[dumbo71]

Why so angry once again one size doesnt fit all so you have alot of money stuffed away congrats but your philosophy and someone elses may not be the same.

It is not anger, it is a firm stance. People can do whatever they want. Problem is they will continue to be poor living paycheck to paycheck. One lost job away from bankruptcy.

At least they'll have that DVC right?????

Seems anyone who doesn't give a feel good response and post glowing reviews of everything DVC is labeled angry or worse here on the Dis. That is really sad.

I hope we all continue to give our honest opinions whether others like it or not. The OP can decide for themselves what is best.

Sorry I will NEVER recommend financing for anyone, ever. Paint it anyway you want it doesn't make sense. DVC is a WANT not a NEED. WANT means cash.

 

[tjkraz]

Overall your post is excellent and hard to disagree with. The part I disagree with is the part about if you wait it will cost you more. That may be the case but it is not always true. The next great promotion is right around the corner if you have the patience and disapline to wait.

But you're selectively picking the time periods to best suit your argument. Most of the time we both know that prices inevitably go up. Last year they were running the "Friends and Family" for $83 per point. Today it's $86 plus closing costs AND you get one less year to enjoy the points. Three months ago it was $91 per point plus closing.

When considering the big picture, sitting there waiting for "the next great promotion" is more likely result in a higher price than it will a lower price.

And even if the prices didn't appreciate substantially over the time period you noted, what value would you attach to the 3 years' worth of vacations you experienced from 2004 to present?

I just don't see this as a black and white issue--it isn't a situation where you can either comfortably write a check for 15K or are one step from the poorhouse.

Personally, I think a greater injustice would be to see a family spending $3000+ cash year-after-year for a trip that includes accommodations at the Beach Club or AKL rather than buying into DVC. And if that family should fall into hard times in 5 or 10 years, liquidating the DVC contract could give them the resources to retain other more important assets.

You yourself said that you draw the line at financing a house. Well, by your implied definition, a house isn't a "need" either. There are more economic housing alternatives like apartments, condominiums, mobile homes, etc. The primary reason to buy a house rather than renting is becuase you build equity in the asset over time. The same can be said for a DVC contract--probably not with the same appreciation as a home, but it's better than giving Disney those dollars each year and having nothing to show for it.

Now, I'll stop short of putting one's house and DVC on equal footing. But in my mind it's clear there are situations where families who regularly vacation at Walt Disney World are much better off in the long run financing part of their DVC purchase rather than paying Disney's cash rates for the same accommodations over an extended period. Yes it may cost them thousands of dollars of Interest which others have been able to avoid. But they stand to save tens-of-thousands in the long run.

To issue a blanket condemnation of anyone who finances a DVC purchase is, in my opinion, irresponsible.

 

[weathernlu]

It is not anger, it is a firm stance. People can do whatever they want. Problem is they will continue to be poor living paycheck to paycheck. One lost job away from bankruptcy.

At least they'll have that DVC right?????

Seems anyone who doesn't give a feel good response and post glowing reviews of everything DVC is labeled angry or worse here on the Dis. That is really sad.

I hope we all continue to give our honest opinions whether others like it or not. The OP can decide for themselves what is best.

Sorry I will NEVER recommend financing for anyone, ever. Paint it anyway you want it doesn't make sense. DVC is a WANT not a NEED. WANT means cash.

Your stance, while perfectly correct, doesn't take into real life. Of course DVC is a want, but IMO vacations are NOT. It's all in a person's point of view. You have no idea the financial status of someone asking if the financing makes sense, and for your information (not that I think you were talking to me) I have my DVC at 10.75% and I have plenty enough to pay the balance off several times over.

For me, as stated earlier, I am not going to dump my savings to pay off DVC. Right now DVC might be costing me some extra money, but not much given the fact that I am going to WDW at least once a year and not paying for accomodations.

I have my savings stuck in an online account earning nearly 6%, so for the 4% difference I rather have the money available to me incase of a unforseen emergency.

Whether you like it or not, some people are not going to wait until they can pay cash for everything. I hear that all the time and while sure it sounds great, most people can't get there with what they make or spend. For me, I am not going to wait until I can pay cash and then wake up at 60 one day going damn I wish I had financed DVC and not waited.

Just because it's the most practical thing to do financially, doesn't make it the right thing in a particular situation.

To each his own.