DVC Financing on OK Credit

[tmaxwell]

So my husband and I are thinking of getting a DVC. We are working on rebuilding his credit.

With points being $182, we are thinking of getting 150 points. Would we have to put 10% down? How are the interest rates going through DVC and rebuilding credit (his credit isn't in the tank but we are getting it out of there).

Thank you!

 

[Jerry5788]

So my husband and I are thinking of getting a DVC. We are working on rebuilding his credit.

With points being $182, we are thinking of getting 150 points. Would we have to put 10% down? How are the interest rates going through DVC and rebuilding credit (his credit isn't in the tank but we are getting it out of there).

Thank you!

Most people would recommend that you save up and purchase with cash. If not often better off renting points instead. This is more due to any savings you would get being a DVC member will be eaten up interest.

Also should reconsider resale as you can get for much less % so can put higher % down and finance that way.

best of luck!

 

[pgp1206]

We just signed a contract last week and they ran credit for both me and my daughter (she was on the contract with us.) They took the higher of the credit scores when figuring the rate. Mine was around 690 and interest rate was 12.5. My daughter had 740 and the rate was 9.99. One of the reasons I ultimately cancelled the contract is because I feel like we can find a better interest rate through a bank or credit union. Of course, they told us you can pay off the loan at any time if you find lower financing through another source. Hope that helps!

 

[pgp1206]

I forgot to mention I think they required at least 10% down. That can be paid in the form of a credit card if needed(Disney Chase credit card gives 0% interest rate for 6 months on Disney vacation and this qualifies.)

 

[goofy kc]

Interest rate is lower with a larger down payment - if that makes a difference. We have purchased both direct and resale. The first was a direct purchase we paid off in less than a year. This made the interest obligation minimal. Our most resent direct purchase is on track to be paid off in about a year. Could we have saved and bought resale? Of course. But, I am impatient and want my points NOW. That said we can travel on miles and can keep to a food budget easily making visits pretty cost effective. When the loans are paid off we tend to splurge on meals.

 

[FireflyTrance]

I would look into resale, the price of the points will be cheaper and there are many third party ways to finance. The lowest DVC would give me directly was 9.99%. I found some third party financing that was in the 6% range.

 

[bumbershoot]

How are the interest rates going through DVC and rebuilding credit (his credit isn't in the tank but we are getting it out of there).

Dvc didn’t care at all what husband’s credit was. It was “neutral” when Chase gave us a 25% interest rate on a used car. Dvc gave us 10% not much later. We were pleased with that.

But I’m case you wonder, Dvc won’t help rebuild credit. They seem to only report to agencies if you default. They don’t report positive stuff. It’s never even showed up on his credit reports.


And before you go cancelling your thoughts, remember that Disney is likely to be kinder, credit-wise, than an external loan. So before you’re swayed by reports of “I can get a loan elsewhere for less” remember that those people might have better credit. We certainly couldn’t have gotten anyone to loan us that money at the time...

 

[Dean]

So my husband and I are thinking of getting a DVC. We are working on rebuilding his credit.

With points being $182, we are thinking of getting 150 points. Would we have to put 10% down? How are the interest rates going through DVC and rebuilding credit (his credit isn't in the tank but we are getting it out of there).

Thank you!

I'd recommend one doesn't finance, it's not a path to getting your credit on track, quite the opposite. But for those set on doing so, I'd do resale. Monera & timesharelending.net will finance as a mortgage and Lightstream is usually even cheaper as a personal loan. Often a CU will give a competitive personal loan. I'd NEVER, EVER do so as a HELOC or loan against a 401K.

 

[jpeterson]

The interest rates Disney presented us with were quite high. We ultimately decided to go ahead and pay cash. If that wasn't an option we would have looked at another lender.

 

[disneynutz]

Disney doesn't report to the credit bureaus so having a loan for DVC won't help with his credit score.

Bill

 

[DSLRuser]

Disney doesn't report to the credit bureaus so having a loan for DVC won't help with his credit score.

Bill

I was just about to say this. I just did an audit of our credit bureaus, and DVC was no where on mine or my wife's reports and we are close to 6 months in.

to the OP....we are 750ish for both our scores.....we got the 9.99% rate with 10% down. do what is right for you. only you know your history and your balence sheet. some times a little debt is good for the soul if it makes you happy.

We have the loan planned out for the 10 years, kind of as a safety net. Based on what I have paid so far, we will pay our 10 year loan off in about 18 months.....but I like the flexibility to have a loan monthly payment that i can pay extra (6x worth) on as desired.

 

[DSLRuser]

loan against a 401K.

Depends.....in 2008...a 401k loan would have paid yourself +8% interest while others were taking a -30% loss during the recession. there is a time an place for everything.

 

[Wakey]

Those interest rates are ridiculous. It's zero risk as they control the entire product, can shut you out, and quickly foreclose.
Wish I could get 12% return on zero risk investment.
Where do I send my money Disney?

 

[Matty B13]

I'm guessing a local Credit Union would give you a better interest rate, or just your local bank. I would also buy resale with the current direct prices being so high. Spend sometime researching DVC and resale and also loan options.

 

[Dean]

Depends.....in 2008...a 401k loan would have paid yourself +8% interest while others were taking a -30% loss during the recession. there is a time an place for everything.

Unless you can predict such events we'll have to agree to disagree, my opinion is unchanged. Still, weathering that 30% loss would have looked pretty good in 2018 at roughly quadruple. There are no situations where a 401K loan or HELOC are reasonable to buy a luxury timeshare. IMO the bottom line is if you can't pay for it you can't afford it.

 

[rg35]

Unless you can predict such events we'll have to agree to disagree, my opinion is unchanged. Still, weathering that 30% loss would have looked pretty good in 2018 at roughly quadruple. There are no situations where a 401K loan or HELOC are reasonable to buy a luxury timeshare. IMO the bottom line is if you can't pay for it you can't afford it.

I agree with this 100%.


Unfortunately "cheap and easy" credit has become the shaky foundation for our economy. People are constantly buying things they can't afford with regularity. The average US household has over $16,000 in credit card debt and little to no retirement savings. That's completely insane to me. Of course some people are just sometimes dealt a really bad hand, but because credit is so easy to obtain there are a lot of people who simply don't want to deal with "doing without."

We never went on vacations when I was a kid. Neither did my wife's family. Those were just luxuries that were for other families. It wasn't until I was in high school that we got on an airplane as a family and went to WDW (and even then it was really only because my grandparents had just bought into DVC and let us use their points for a trip, which at the time also included park tickets).

 

[ToddyLu]

Yep they don't "care" per se what your credit is because Disney owns the product. You don't pay, they cancel the membership and sell your points all over again. It is a win-win for them. Please do not discount the fact that just owning DVC encourages you to vacation at WDW...one of the most expensive places to go for a vacation. DVC isn't going to help rebuild credit but using it can put you in debt. Now saying that, it was one of the best decisions we ever made

 

[Cyberc1978]

I don’t know if this is even possible in the U.S but in Denmark we have a mortgage credit.

A mortgage credit is quite similar to a regular credit the bank just have security in your house. You only pay interest of the amount you take out not the entire credit.

You pay a higher interest compared to a regular mortgage. In our case we pay 2.5% should we choose to use the credit.

 

[Dean]

I don’t know if this is even possible in the U.S but in Denmark we have a mortgage credit.

A mortgage credit is quite similar to a regular credit the bank just have security in your house. You only pay interest of the amount you take out not the entire credit.

You pay a higher interest compared to a regular mortgage. In our case we pay 2.5% should we choose to use the credit.

That's the HELOC I was referring to. Putting one's home at risk for a timeshare is a poor choice IMO.

 

[the_grinch]

That's the HELOC I was referring to. Putting one's home at risk for a timeshare is a poor choice IMO.

just trying to understand but how is putting something on HELOC putting your house at risk worst case you sell the DVC and what ever is not enough you put on person loan credit card or what ever you need to ,but you can very easily take a HELOC and if things go south your house is not at risk or do i not understand how a HELOC loan works?(i agree you will lose money doing this my point is you will not lose your house)