Is a Timeshare Loan Like a Mortgage?

Is a Timeshare Loan Like a Mortgage?

When you go to a timeshare sales presentation, they will often put “extras” on the table, available only if you sign that very day. Naturally, a condition for being able to sign that day is that you have the financing to cover the purchase price. Lucky for you, the resort just happens to work with a lender that can secure the loan on the spot! It’s like a mortgage, they may tell you. “You can deduct it from your taxes!”

Yeah. Make no mistake. That loan—that loan company—is a subsidiary or otherwise connected branch of the resort itself. In fact, this is one of the chief moneymaking tendrils of these disgusting timeshare companies. And  if they say you can deduct that loan from your taxes, they’re presenting the purchase as a purchase of property. But this isn’t a mortgage you’re buying—it’s just the right to use someone else’s property. And you cannot—CAN NOT—deduct it from your taxes. It’s, rather, a personal loan.

In fact, private banks will never mortgage a timeshare. When a bank creates a mortgage, it is they who take on the ownership of the property until the purchaser pays off the loan. And no bank wants to take a timeshare interest on in that way—it’s too risky. Timeshares simply aren’t worth what the resort owners charge for them, and they are terribly difficult to re-sell, even for a fraction of the loan cost.

Which is why the lender and the resort are often the same entity—that resort already owns the timeshare. Making the loan creates no extra risk for them; it only nets them profit, both from the sale and from the interest.

All of this said, if you still think you want to get a timeshare … first of all, you must be willing to walk away from the “today only” language. And, secondly, you should take the time to either secure an unsecured personal loan from a bank (again, no bank will mortgage this “property”) with better terms than the resort would ever offer. Another option would be to get a home equity loan, which is likely to have even lower interest.

For our part, we recommend just not getting into bed with those timeshare con men at all. But if you’re determined to do so, at least protect yourself to the fullest extent possible. Definitely don’t go with the loan they offer you. If you’ve recently signed a timeshare contract, whether under the lousy terms of one of their loans or otherwise, and want to try for cancellation, contact us. We here at The People’s Advocate take on the timeshare industry from our home-base of Hollywood, Florida, to help people who are put through deceptive sales marathons and pressured into signing contracts by dishonest sales-people using lies and manipulation tactics.

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