Has anyone heard about Disney's direct interest

[marivigi]

Rates going up sometime this week?

 

[z28wiz]

Yes they are going up.
Sent from my iPhone using DISBoards

 

[GBPackers]

What are the new rates? Wow I thought they were high enough.

 

[kim532]

Did anyone ever hear what the new rates are?

Kim

 

[Msmithmd]

That's great news. Just as when Disney added the resale restrictions that steer members away from point-inefficient uses of their contract, by raising the interest higher on financing they steer people away from buying timeshares on credit.

The true irony is that these are fully secured loans, in that Disney can foreclose and resell the points as new if people cannot keep their commitment. Therefore their loans SHOULD be relatively inexpensive versus many other loan vehicles. But if by this money grab DVC convinces some people to save before they spend on a luxury purchase, then all the better...

 

[BestDadEver]

That's great news. Just as when Disney added the resale restrictions that steer members away from point-inefficient uses of their contract, by raising the interest higher on financing they steer people away from buying timeshares on credit.

The true irony is that these are fully secured loans, in that Disney can foreclose and resell the points as new if people cannot keep their commitment. Therefore their loans SHOULD be relatively inexpensive versus many other loan vehicles. But if by this money grab DVC convinces some people to save before they spend on a luxury purchase, then all the better...

I think your right . Depending on what it goes up to . It will deter me from financing with them . I can do better on a credit card lol. Might not actually deter sales people probably get financing else where

 

[Dean]

That's great news. Just as when Disney added the resale restrictions that steer members away from point-inefficient uses of their contract, by raising the interest higher on financing they steer people away from buying timeshares on credit.

The true irony is that these are fully secured loans, in that Disney can foreclose and resell the points as new if people cannot keep their commitment. Therefore their loans SHOULD be relatively inexpensive versus many other loan vehicles. But if by this money grab DVC convinces some people to save before they spend on a luxury purchase, then all the better...

It's the timeshare way. For somewhere like GF it might be that there's another buyer around the corner but not for most other properties. Any points they get back, they have to pay dues on them and they have to pay additional marketing/commissions plus those points are competing with other points they have for sale. I know your post related to driving people away from financing is sarcasm but I see it as a true positive as I do the resale restrictions as well.

 

[Msmithmd]

Not sarcasm at all. I think buying a timeshare with financing is a horrible idea. So I'm genuinely glad Disney is apparently trying to drive people away from doing so.

And you're right of course about the points for the older resorts in a usual market. But with the current wait lists, they're probably not crying to take points back for just the cost of their in-house lawyer foreclosing on the deed.

 

[Dean]

Not sarcasm at all. I think buying a timeshare with financing is a horrible idea. So I'm genuinely glad Disney is apparently trying to drive people away from doing so.

And you're right of course about the points for the older resorts in a usual market. But with the current wait lists, they're probably not crying to take points back for just the cost of their in-house lawyer foreclosing on the deed.

Thanks for updating, the wording in your first paragraph suggested to me that you were being sarcastic in those remarks. I apologize for misreading you.

I'd argue that there's more cost involved than just the paperwork and that every point they have to resell still competes with retail sales (AKV, BLT, GF) but certainly if they have a WL and can unload those points retail, they are in a good position.

 

[tazleiten12]

I believe they went up already on the 18th? It looks like these are the new rates. I'm not positive, but I got these from a DVC online guidebook I had in my old mail. It was dated 7/18/13:


Standard
10% down 17.5%
20% down 14.5%

Preferred
10% down 14.5%
20% down 12.0%

Premium
10% down 12.0%
20% down 9.99%

DVC Member
10% down 11.0%
20% down 8.99%

 

[mandarose210]

As someone looking to finance (we are 24&26 and wanted DVC for our future family) the hike in rates definitely drive us away. We own our own home and our interest rate is so low that we figured a second mortgage on something we could enjoy and use with our family vs a main living residence wouldn't be unmanageable. However, at these rates (though the tax write off on the interest end would be pretty amazing), it puts financing through Disney directly out of question. I have a personal line of credit which is unsecured and has a lower interest rate. For those of us still starting out and wanting to go a financing route while we are young and willing to carry some extra debt if it means our future children will have some amazing experiences... This is disappointing. However, determined people will find financing elsewhere...At a better rate, which hurts Disney bottom line as they'll be collecting less "free" money on their end due to people searching for better rates and Disney not collecting as much interest on newly purchased property. Poor business decision if you ask me. From a business stand point I would think they'd want to be competitive, maybe slightly higher with a finance through us and get ____ to entice people to finance through them. Just a thought.

 

[luv2sleep]

I believe they went up already on the 18th? It looks like these are the new rates. I'm not positive, but I got these from a DVC online guidebook I had in my old mail. It was dated 7/18/13:


Standard
10% down 17.5%
20% down 14.5%

Preferred
10% down 14.5%
20% down 12.0%

Premium
10% down 12.0%
20% down 9.99%

DVC Member
10% down 11.0%
20% down 8.99%

So if you are already a DVC member your rates are 11% and 8% no matter what?

 

[alice99]

Does anyone that takes these loans ever figure out the dollar amount they end up paying for the DVC timeshare?

I would think you could vacation every year in Disney resort on the interest costs alone.

... or take a home equity loan for 3-5%?

 

[tazleiten12]

I believe so, 8.99 if you put 20% down and 11.0% if you put 10% down. It was previously 8.0% and 10.5%.

So if you are already a DVC member your rates are 11% and 8% no matter what?

 

[Sandisw]

Does anyone that takes these loans ever figure out the dollar amount they end up paying for the DVC timeshare?

I would think you could vacation every year in Disney resort on the interest costs alone.

... or take a home equity loan for 3-5%?

Actually, I looked at financing back in 2009 and even with those costs--the interest rate at the time was 10.75%--and compared that to what we were paying for a room at the CR, assuming a 30% discount.

Based on that, it was going to cost us just around the same for the 10 years of the loan. The big difference, though, was that we would have the points to do a 1 bedroom vs. the room. So, while it wasn't going to "save" us over the cost of staying a cash guest, it wasn't going to cost us more to be DVC members, even with the financing.

We ended up not needing to finance, and fast forward 4 years, we have spent a lot more money buying additional points, so DVC has been more expensive...BUT we are no longer visiting just 5 nights a year either. We go at least 3 times a year, sometimes for long weekends just DH and I and always a summer trip for 5 to 7 nights, now in a 2 bedroom!

 

[luv2sleep]

I believe so, 8.99 if you put 20% down and 11.0% if you put 10% down. It was previously 8.0% and 10.5%.

Thanks! I had no idea the financing rates were different for current DVC members. Hmmm, wonder why my guide didn't tell me that?

 

[alice99]

Actually, I looked at financing back in 2009 and even with those costs--the interest rate at the time was 10.75%--and compared that to what we were paying for a room at the CR, assuming a 30% discount.

Based on that, it was going to cost us just around the same for the 10 years of the loan. The big difference, though, was that we would have the points to do a 1 bedroom vs. the room. So, while it wasn't going to "save" us over the cost of staying a cash guest, it wasn't going to cost us more to be DVC members, even with the financing.

We ended up not needing to finance, and fast forward 4 years, we have spent a lot more money buying additional points, so DVC has been more expensive...BUT we are no longer visiting just 5 nights a year either. We go at least 3 times a year, sometimes for long weekends just DH and I and always a summer trip for 5 to 7 nights, now in a 2 bedroom!

Your situation is similar to mine, as we go 2-3 x's per year. When I retired I had some disposable income so I purchased my DVC points, knowing how I'd be using them. I cannot imagine paying the interest rates Disney charges... the following figures would have deterred me. People get so caught up in wanting to own a piece of Disney , they are willing to pay these outrageous interest rates.

At 10.5% interest , a 18K loan, 10 years = $11,145.00 in interest, total cost $29,145.00 **edit, the actual interest rate is 11%, so numbers would be worse than this, but I'm too lazy to figure the 11%

At 8.99% interest, an 18K loan for 10 years = $9350.00 in interest, total cost $27,350.00.

The only way i'd take a loan to purchase Disney points would be at current mortgage rates, less than 3%, taking a second mortgage on my home.
I know a lot of people say they don't want to risk their home for DVC and prefer a separate loan... but, in that case, if they think they can't afford the 2nd mortgage, and their home will be at risk (with the 3% loan), how can they expect to keep up on a loan at an interest rate between 8.9 and 12% ??

It doesn't make sense to me to pay SO much interest on a luxury purchase, no matter how you try to justify the purchase .... the numbers don't lie.

I chose 18K as my standard loan for this example, considering a minimum of 160 points @ $115.00 each = $18,400.00. Which, at this point, is a conservative estimate.

 

[alice99]

I believe they went up already on the 18th? It looks like these are the new rates. I'm not positive, but I got these from a DVC online guidebook I had in my old mail. It was dated 7/18/13:


Standard
10% down 17.5%
20% down 14.5%
%

At these rates Disney is coming pretty close to committing a crime, Usury (more commonly known as Loansharking).

u·su·ri·ous
/yo͞oˈZHo͝orēəs/
Adjective
Of or relating to the practice of usury: "they lend money at usurious rates".

In Florida, 25% is considered Usury aka Loansharking. .... 17.5 isn't 25% , that's for sure, but really is an outrageous interest rate.

 

[Sandisw]

Your situation is similar to mine, as we go 2-3 x's per year. When I retired I had some disposable income so I purchased my DVC points, knowing how I'd be using them. I cannot imagine paying the interest rates Disney charges... the following figures would have deterred me. People get so caught up in wanting to own a piece of Disney , they are willing to pay these outrageous interest rates.

At 10.5% interest , a 18K loan, 10 years = $11,145.00 in interest, total cost $29,145.00 **edit, the actual interest rate is 11%, so numbers would be worse than this, but I'm too lazy to figure the 11%

At 8.99% interest, an 18K loan for 10 years = $9350.00 in interest, total cost $27,350.00.

The only way i'd take a loan to purchase Disney points would be at current mortgage rates, less than 3%, taking a second mortgage on my home.
I know a lot of people say they don't want to risk their home for DVC and prefer a separate loan... but, in that case, if they think they can't afford the 2nd mortgage, and their home will be at risk (with the 3% loan), how can they expect to keep up on a loan at an interest rate between 8.9 and 12% ??

It doesn't make sense to me to pay SO much interest on a luxury purchase, no matter how you try to justify the purchase .... the numbers don't lie.

I chose 18K as my standard loan for this example, considering a minimum of 160 points @ $115.00 each = $18,400.00. Which, at this point, is a conservative estimate.

My point though, was that even with the interest rates, had I stayed going to Disney once a year as I did before DVC, I would not have been spending more than I would have had I remained a cash guest. The only difference was the commitment of at least 10 years. Since we didn't anticipate the trips stopping, we decided to buy.

There is no doubt not financing will be less expensive than doing it. But remaining a cash guest at the CR was not going to be cheap either and since I was getting a lot more for my money, it was worth it for us.

I certainly respect that for others, this would not be their choice.

 

[tubtruck]

I suppose it also depends if you have the ability to repay faster as to what the actual cost will be. I took out a 10 year loan for my first points back in 2006 and the rate was 10% at the time, I chose 10 years as I knew that I could afford the repayment on an expensive month. I was able to make overpayments and I rented some of the first years points out to also help. I managed to pay the whole of the loan off after 6 months so it ended up being fairly inexpensive.