Financing Terms If Buying Direct

[countrypilot]

Considering the 100 points direct purchase at SSR or OKW for the price to become a blue card holder then buying the rest resale. I do have a question based on a DVC show that discussed financing. I'm actually not a fan of this option for several reasons. However, I'm considering buying direct then paying off quickly/early. I have excellent credit so would get the best rate. Does anyone know how the financing terms are structured specifically the interest? Is it like a traditional mortgage where you pay high interest first with little principal at the beginning, or is the principal and interest the same throughout the term? Maybe it is something entirely different. I do know you only pay off the remaining principal to pay off the loan not the remaining interest too unlike a car loan. I'm trying to decide if a 5 year of 10 year makes more sense. I'd pay it off in 5 months.

 

[E2ME2]

Considering the 100 points direct purchase at SSR or OKW for the price to become a blue card holder then buying the rest resale. I do have a question based on a DVC show that discussed financing. I'm actually not a fan of this option for several reasons. However, I'm considering buying direct then paying off quickly/early. I have excellent credit so would get the best rate. Does anyone know how the financing terms are structured specifically the interest? Is it like a traditional mortgage where you pay high interest first with little principal at the beginning, or is the principal and interest the same throughout the term? Maybe it is something entirely different. I do know you only pay off the remaining principal to pay off the loan not the remaining interest too unlike a car loan. I'm trying to decide if a 5 year of 10 year makes more sense. I'd pay it off in 5 months.

When I added on DIRECT through Disney, I was able to get 6 Month financing for free (0% interest). It was on my Disney Visa card, so I also got CC Points for the purchase.
So, if you can certainly pay off within 5 months anyway, you should look into that. Only thing about buying direct first is it will be more of a challenge finding a resale with the same use year.
Good Luck!
ET

 

[Tigger1]

Possible lower interest for 5 year loan. Yes its like a typical loan where you pay higher interest first since the you owe more.

Basically you take the amount owed and that is multiplied by the interest rate to determine how much of payment goes towards interest and how much towards the principle. For instance if the rate is 12% per year, then divide that by 12 months. That would be 1 % . Multiple how much you owe by 1% and that is the part of payment that goes towards interest.

These figures are not exact but maybe a close approximation.
$10,000 Loan @ $200 payment

$10,000 * 12 % interest / 12 months = $100 interest for that month and $100 in principle.
If you pay $200 per month you would know owe $10,000 - $100 = $9900

$9,900 * 12 % interest / 12 months = $99 interest. $200 payment - $99 interest = $101 to principle
$9,900 - $101 to principle= $9,799 is knew principle.

If you google a mortgage calculator some will show how each payment is calculated for principle or interest each month.

 

[countrypilot]

When I added on DIRECT through Disney, I was able to get 6 Month financing for free (0% interest). It was on my Disney Visa card, so I also got CC Points for the purchase.
So, if you can certainly pay off within 5 months anyway, you should look into that. Only thing about buying direct first is it will be more of a challenge finding a resale with the same use year.
Good Luck!
ET

I like that idea a lot, but I use a Southwest Rapid Rewards card for everything to get the companion pass. Also, if my situation did change and I couldn't pay early then the 17% on a credit card could prove to be problematic. Unlikely, but I always plan for the worst. A 5 - 10 year spread out payment would not be wise financially, but at least it wouldn't be ruinous. Now if I get enough in savings to pay it all of at once, I might do the credit card for this option. However, I still have the SWA CC quandary.

Good point on the use year too! Will keep that in mind. I'm looking into a Epcot resort September use year on resale so we can go to Food and Wine every other year in October. The direct would be for late Summer in July before my kids go back to school in the other years so a June use year makes more sense. Hence, buying direct in June use year at SSR or OKW first might strangely make more sense.

 

[countrypilot]

Possible lower interest for 5 year loan. Yes its like a typical loan where you pay higher interest first since the you owe more.

Basically you take the amount owed and that is multiplied by the interest rate to determine how much of payment goes towards interest and how much towards the principle. For instance if the rate is 12% per year, then divide that by 12 months. That would be 1 % . Multiple how much you owe by 1% and that is the part of payment that goes towards interest.

These figures are not exact but maybe a close approximation.
$10,000 Loan @ $200 payment

$10,000 * 12 % interest / 12 months = $100 interest for that month and $100 in principle.
If you pay $200 per month you would know owe $10,000 - $100 = $9900

$9,900 * 12 % interest / 12 months = $99 interest. $200 payment - $99 interest = $101 to principle
$9,900 - $101 to principle= $9,799 is knew principle.

If you google a mortgage calculator some will show how each payment is calculated for principle or interest each month.

Thank you! if this is the case then the shorter loan term makes the most sense as paying off more principal.

 

[Tigger1]

Look at resale sites to see which use years are mostly sold. I don't think Disney offers every month as a use year. Seems most resales are for December.

 

[E2ME2]

I like that idea a lot, but I use a Southwest Rapid Rewards card for everything to get the companion pass. Also, if my situation did change and I couldn't pay early then the 17% on a credit card could prove to be problematic. Unlikely, but I always plan for the worst. A 5 - 10 year spread out payment would not be wise financially, but at least it wouldn't be ruinous. Now if I get enough in savings to pay it all of at once, I might do the credit card for this option. However, I still have the SWA CC quandary.

Good point on the use year too! Will keep that in mind. I'm looking into a Epcot resort September use year on resale so we can go to Food and Wine every other year in October. The direct would be for late Summer in July before my kids go back to school in the other years so a June use year makes more sense. Hence, buying direct in June use year at SSR or OKW first might strangely make more sense.

Good Luck-
Not a FAN of more CCs, but I did take advantage of Disney CC Promo offer, to get bonus points, and to use for the direct purchase.
I did the same thing with the SWA-RR Card, and got a huge point bonus promotion.
Then, I even got another CC when SPG offered 100,000 points (just before merging with BONVOY), and we used them for a full week's stay in Lake Buena Vista in 2018!
This year, I grabbed an Amtrak Guest Reward CC, as we're going to do the AutoTrain next year.
I am fortunate that I've not yet "financed" anything beyond the 0% dates.
I try to be strategic in which card I use for which purchase, to maximize the points dependent upon where I can use them most.
I only recommend this to folks who know for sure that they will not be stuck incurring interest payments, but can pay the balance in full each month !
ET

 

[countrypilot]

Good Luck-
Not a FAN of more CCs, but I did take advantage of Disney CC Promo offer, to get bonus points, and to use for the direct purchase.
I did the same thing with the SWA-RR Card, and got a huge point bonus promotion.
Then, I even got another CC when SPG offered 100,000 points (just before merging with BONVOY), and we used them for a full week's stay in Lake Buena Vista in 2018!
This year, I grabbed an Amtrak Guest Reward CC, as we're going to do the AutoTrain next year.
I am fortunate that I've not yet "financed" anything beyond the 0% dates.
I try to be strategic in which card I use for which purchase, to maximize the points dependent upon where I can use them most.
I only recommend this to folks who know for sure that they will not be stuck incurring interest payments, but can pay the balance in full each month !
ET

What are the Disney points good for? If I bought SSR or OKW with a Disney CC and put $12k on it. Let's say the total is $18k. I'd pay $6k upfront then put $12k on the card. Paying $2k per month isn't too steep. Is $12k enough to earn anything in points? I'd likely cancel the card shortly after purchasing.

 

[E2ME2]

What are the Disney points good for? If I bought SSR or OKW with a Disney CC and put $12k on it. Let's say the total is $18k. I'd pay $6k upfront then put $12k on the card. Paying $2k per month isn't too steep. Is $12k enough to earn anything in points? I'd likely cancel the card shortly after purchasing.

I rack up my points at year end, convert them to a Disney Gift Card, and use the Disney Gift Card towards my yearly Maint. Fees (I also buy Disney GCs at BJs when they're on sale each yer, usually for about 6% off face value)
Learned all that form others here on the forums!
ET

 

[MICKIMINI]

Disney pays 2% for all things Disney. When points are in your account, you transfer to a Disney Rewards Card and you can buy Disney GC's - it is a convoluted way to do things and doesn't pay that much. I would rather use SW CC and get free flights or use a better rewards card.

I'd run the 6K through a card and write a check immediately...don't loose those points or miles by paying cash!

 

[bumbershoot]

Financing through Disney is a mortgage. Even says it on the paperwork. Interest is tremendously high relative to principal at the beginning.

Personally I’d rather just wait the 5 months and buy once you have the full amount.

For us it would have taken much much longer to buy with cash so we financed. We could have done cash if it would only have taken 5 months!


Just be sure the reasons for wanting that blue card are solid.

 

[ClemTig]

Another thought is, if you have "almost" enough to purchase you can rent the first years points to close the Gap. (put it on a card then pay off the card with proceeds from the rental) I did that with my first purchase 22 years ago. Today you can get $15-20/point on rentals.

 

[zakdavid]

I did the chase Visa card for the 6 months and then did a balance transfer to another card for 12 more months of 0% APR and the balance transfer fee was only 3%. Paid it off, and essentially paid 3% interest.

 

[countrypilot]

I did the chase Visa card for the 6 months and then did a balance transfer to another card for 12 more months of 0% APR and the balance transfer fee was only 3%. Paid it off, and essentially paid 3% interest.

Now this is a great idea! at $12,000 you're only talking $360 which isn't bad at all. Even the fee to finance direct with Disney is like $150 then you're probably over $360 with just two months of interest.

 

[zakdavid]

Now this is a great idea! at $12,000 you're only talking $360 which isn't bad at all. Even the fee to finance direct with Disney is like $150 then you're probably over $360 with just two months of interest.

Plus the disney visa gives 2% cash back so I only paid 1% on top of it. If you can pay it off in 18 months and can open two new credit cards at the time needed the disney visa to buy and then another one to transfer 6 months later I don't see a better way to finance

 

[Deb & Bill]

There are two Disney Visa cards through Chase. One is interest free and you get $1 per $100. The other has a yearly fee (don't know what that is) and pays different amounts for different types of purchases.

 

[zakdavid]

There are two Disney Visa cards through Chase. One is interest free and you get $1 per $100. The other has a yearly fee (don't know what that is) and pays different amounts for different types of purchases.

I did the premier which does 2%. It has a 49 dollar annual fee but gives you a 200 dollar signup bonus. So I signed up paid the fee and came ahead by 150. You can then downgrade to the lower card if you wanted too before you pay the fee the next year