DVC loan interest rates

[Cfabar1]

We all make our choices and choose how to spend our money...

a 15 year DVC loan is something that doesn't appeal to me... Personally I would never want my DVC experience to feel like a burden, which I think it would for me is how it would feel... I pay my dues annually for example because I just don't want to see that bill every month.

That said, in my view any DVC purchase is a poor financial decision, but it might be a great personal decision for the buyer depending on the circumstances.

And, though I don't buy DVC for the purpose of resale value, it is nice to know that you can offload it and at least get something which is different than spending the night in the cash hotel rooms.

 

[Girlstar30]

I was typing up something very similar. If Disney vacations are important to your overall happiness in life then go for it. But you can still stay at a value resort or an off site location and fulfill your Disney dreams. I've seen many posts in Facebook groups asking about how to sell quick because people have fallen on hard times or circumstances changed personally and they have a loan to payoff. It's a big committment and one I wouldn't want to walk into with a loan as baggage on the experience.

Another post above quoted 250 a month but that doesn't even cover the interest on top of paying principal down while still having maintenance fees to take care of each year.

Yes but a lot of people dont understand or care how much money is really going to interest. And 100 extra dollars for maintenance fees on top of 250 isnt going to stop them. I personally know people that go into debt for Disney.

I had a friend that didnt have a car, but had a Disneyland pass.

I have another friend that goes on vacation with us that is paying down her over limit credit card right now to be able to charge up more to go on vacation with us this year.

Not my job to judge her. I also live in an upper middle class area and so do the people i know.

On these boards it seems like almost everyone has 30k cash saved to spend on a direct contract or multiple direct contracts. That is not the reality for most people.

The reality is people can and do go into debt for Disney a lot whether its responsible or not. My friend knows she's being irresponsible. Her reason? YOLO. I can die tomorrow!

I know someone that has ran up every credit card they could get their hands on and says see ya in 7 years, every time!

A more extreme case is a girl i hung out with in high school and my jaw dropped when I saw her on the news for becoming an escort and running up the guy she was using's company credit card in the millions and as she was getting caught she posted on her social media, "Run it up till the feds come up!" And they sure did!

I am embarrassed to admit i know some of these people but my point is i know for sure how irresponsible adults can be Buying a timeshare on high credit is nothing pshh. You should hear about payday loans with 400% annual interest. And yes I knew someone that pulled them every single month

And ofc im not condoning any of this or saying people should take out a 15 year dvc loan. I am firmly against that personally, but trust me many people will do it with no issue.

 

[Steelers0854]

If both husband and wife are on the contract and want to finance part direct with Disney, do they do credit pulls on both? Will each be a hard pull for Direct financing?

If you have been a DVC owner for over a year, even resale, there is no credit check. If you are brand new to DVC yes I believe they do a credit check. The loan does not show on your credit report, but you will receive a 10-98 for tax purposes every year.

 

[Cfabar1]

On these boards it seems like almost everyone has 30k cash saved to spend on a direct contract or multiple direct contracts. That is not the reality for most people.

I think a lot of that is people who have 30k sitting around to spend on these contracts are quick to share that story. They're proud of their success (as they should be), and have no qualms sharing their purchase journey.

The middle class family that has stable jobs might be more afraid of publicly admitting they did a 5 year financing or 10 year loan for their DVC contract. Kind of like how every sale on the ROFR boards is an absolutely amazing deal and well below the average price. It is possible some who didn't get a great deal aren't as eager to share.

 

[Girlstar30]

I think a lot of that is people who have 30k sitting around to spend on these contracts are quick to share that story. They're proud of their success (as they should be), and have no qualms sharing their purchase journey.

The middle class family that has stable jobs might be more afraid of publicly admitting they did a 5 year financing or 10 year loan for their DVC contract. Kind of like how every sale on the ROFR boards is an absolutely amazing deal and well below the average price. It is possible some who didn't get a great deal aren't as eager to share.

I completely agree!

 

[Brian Noble]

for DVC to be so greedy and not to offer something like 7% is absurd.

I understand where you are coming from, but disagree. Strongly. There is no reason---none, zero, zip---why Disney should offer anything close to the 30 year fixed mortgage rate on a timeshare. Per bankrate, the current national average is about 6.9%.

The fact that Disney will finance an existing member at 9% in the current interest rate market is quite generous.

 

[Kingkonig]

I understand where you are coming from, but disagree. Strongly. There is no reason---none, zero, zip---why Disney should offer anything close to the 30 year fixed mortgage rate on a timeshare. Per bankrate, the current national average is about 6.9%.

The fact that Disney will finance an existing member at 9% in the current interest rate market is quite generous.

Extremely generous. The last decade of near-zero interest rates really broke people’s perception of “good rates”. Auto manufacturers also running significant discounts on cars for 1-2% (as their entire model with dealerships requires them to keep the cars moving off the lot) doesn’t help set expectations.

Unlike autos or a traditional real estate developer, Disney doesn’t have to move inventory quickly. They can sell rooms for cash and make a decent return, even if it’s not enough to offset capex as quickly as they originally wanted. Auto manufacturers will take a small (expected) loss on interest as a cost of doing business when moving cars. Disney has no real reason to do so.

 

[Steelers0854]

I understand where you are coming from, but disagree. Strongly. There is no reason---none, zero, zip---why Disney should offer anything close to the 30 year fixed mortgage rate on a timeshare. Per bankrate, the current national average is about 6.9%.

The fact that Disney will finance an existing member at 9% in the current interest rate market is quite generous.

This rate is for mortgages on your primary residence, remember these are essentially vacation properties and will carry an even higher interest rate, which makes Disney’s current rate an even better deal especially considering it has 0 impact on your credit (you could argue thats good or bad).

 

[airjay75]

According to my quick google/AI research, average home equity loans currently vary from 6.63% to 10.43%. Loans against a primary residence are significantly more secure than loans against a time share interest. To @Brian Noble's point, the fact that DVC is willing to lend at a rate anywhere near 10% is pretty darn generous.

 

[Girlstar30]

According to my quick google/AI research, average how equity loans currently vary from 6.63% to 10.43%. Loans agains a primary residence are significantly more secure than loans against a time share interest. To @Brian Noble's point, the fact that DVC is willing to lend at a rate anywhere near 10% is pretty darn generous.

Shhhh they might hear you

 

[atthebeachclub]

A more extreme case is a girl i hung out with in high school and my jaw dropped when I saw her on the news for becoming an escort and running up the guy she was using's company credit card in the millions and as she was getting caught she posted on her social media, "Run it up till the feds come up!" And they sure did!

I grew up in an area that has become extremely wealthy, and many of my classmates couldn’t afford to stick around (same for me).

One woman I knew from high school made the local news when she was prosecuted for sneaking a much older man with dementia out of his adult family home living situation and marrying him after just meeting him, presumably to gain access to his finances. I noted she had been able to purchase a house in my hometown, which is a goal that is out of reach for me. I suspect these two things are related, and I really think people will do anything for money. Including over borrowing, in ways that will hurt them in the end.

 

[Sandisw]

I think a lot of that is people who have 30k sitting around to spend on these contracts are quick to share that story. They're proud of their success (as they should be), and have no qualms sharing their purchase journey.

The middle class family that has stable jobs might be more afraid of publicly admitting they did a 5 year financing or 10 year loan for their DVC contract. Kind of like how every sale on the ROFR boards is an absolutely amazing deal and well below the average price. It is possible some who didn't get a great deal aren't as eager to share.

I have to agree that everyone is not always eager to share, especially when it comes to financing.

 

[airjay75]

I think it's one of those things where, we all know that, if we have to finance, it probably doesn't make sense to purchase DVC. And if you share on these boards that you're financing (particularly at 10% interest rates or more), people will generally advise against it. But, if you can talk yourself into DVC making sense without any financing, then it doesn't take much more rationalization to talk yourself into financing and/or telling yourself you'll pay it off quickly, so the interest charges won't be all that significant. There are also alternate ways to finance these purchases other than through DVC - play the 0% promo balance transfer game on credit cards, home equity loans, 401k loans are a few that come to mind. Sharing details about some of those things can get to be a bit much for an anonymous discussion board.

 

[Girlstar30]

I think it's one of those things where, we all know that, if we have to finance, it probably doesn't make sense to purchase DVC. And if you share on these boards that you're financing (particularly at 10% interest rates or more), people will generally advise against it. But, if you can talk yourself into DVC making sense without any financing, then it doesn't take much more rationalization to talk yourself into financing and/or telling yourself you'll pay it off quickly, so the interest charges won't be all that significant. There are also alternate ways to finance these purchases other than through DVC - play the 0% promo balance transfer game on credit cards, home equity loans, 401k loans are a few that come to mind. Sharing details about some of those things can get to be a bit much for an anonymous discussion board.

It makes a lot of sense to finance resale and pay off asap, direct is harder to justify, although im sure even if you did that and held thru the life of the contract you'd still come out ahead

 

[Girlstar30]

I grew up in an area that has become extremely wealthy, and many of my classmates couldn’t afford to stick around (same for me).

One woman I knew from high school made the local news when she was prosecuted for sneaking a much older man with dementia out of his adult family home living situation and marrying him after just meeting him, presumably to gain access to his finances. I noted she had been able to purchase a house in my hometown, which is a goal that is out of reach for me. I suspect these two things are related, and I really think people will do anything for money. Including over borrowing, in ways that will hurt them in the end.

Thank you for posting this, it makes me feel better about the crazy ive encountered

This girl got her hands on this man's company credit card, he had a high paying job as a top earner at a pharmaceutical company, and ran it up like it was nothing.

I have no idea how she didnt think she would get caught one day She was living at one of the most sought out neighborhoods in San Diego paying $12k a month rent on this house.

I wondered how she could afford this when she invited me over and I walked into her mansion and her children had a private driver to school, etc. They ended up raiding the house and she spent four years in prison.

To top it off when she got caught and convicted, she convinced the judge to give her time to get her children's affairs in order and at that time she applied for a fradulent PPP loan during covid and was given more money using her fraudulent businesses.

Some people really dont give a crap!!! I see she's out now and teaches Sunday school at a local church.

You cant make this stuff up

 

[StitchesGr8Fan]

If you have to finance a timeshare for 15 years, you can’t afford it.

Isn’t the average amount of time of owning a DVC contract less than 15 years? I read the statistic once but can’t remember the exact number.

 

[Kingkonig]

Isn’t the average amount of time of owning a DVC contract less than 15 years? I read the statistic once but can’t remember the exact number.

I do recall hearing that, but I'm curious as to the dataset. Is it including those who have bought and haven't sold (for example, say somebody who first bought and never sold Riviera or Aulani, that would obviously have a lower than 15 year ownership, but that doesn't mean they are going to sell).

It does make me think it is very similar to the DVCFan "We conducted a poll on our Facebook page" or "here's the averages we are deciding to publish regarding internal company data" where they then mistakenly extrapolate that across all DVC owners. I do think they said on their podcast that it is a 7-8 year average, but don't recall when it was last said.

 

[Cfabar1]

It makes a lot of sense to finance resale and pay off asap, direct is harder to justify, although im sure even if you did that and held thru the life of the contract you'd still come out ahead

maybe... I think Polynesian certainly will because of the absurd price of studios/hotel rooms.

 

[TheDailyMoo]

I actually go into debt (technically) with each contract I purchase (resale). I will put the max down on a newly opened credit card with an 18-24 month interest free option. I will get the Sign up Bonus for doing that. I will then take the cash I would've used to pay outright and instead park the whole thing in a T-Bill of matching length to collect interest and then pay off the remainder of the contract when the term is up.

IF I wanted to purchase and I DIDN'T have the cash then I guess what I would do is the same thing (if direct spread out over a few cards interest free) then when the 18 months or 2 years was up I'd transfer the balance to a card/cards offering a promo rate of 0% (usually with a fee of 3-4%) and ride that another year or two. I would hope 3-4 years of minimal interest would be enough to slowly pay off the contract. If you need all 15 years at max interest rate then sorry to say...that's a very bad idea.

 

[BeachClub2014]

Thank goodness for folks willing and able to finance their DVC contracts! Without that majority of buyers, DVD couldn't exist as it does today, building shiny new resorts that we all love and adore. Those things are built and sold on the back of consumer debt. I have no hard data, but I am willing to bet a lot of Mickey premium bars that the majority of contracts purchased from DVD are financed.

I would go even further, again without any real DIsboards evidence (as is so often requested) that many of the most vocal "if you have to finance a timeshare, then you can't afford it" voices probably financed their purchase.