In August 2016, Vistana’s parent company claimed that the average interest rates it charges when it gives timeshare loans for Vistana and Hyatt Residential timeshares is about 13%.[i]  They also reported that the average transaction price for a timeshare sale at that time was $17,575.[ii]

Let’s look at a concrete example of what that means.  Let’s say you buy a timeshare for $17,575, pay 20% upfront and financed the rest with a $14,060 loan from the timeshare developer.  Let’s say it’s a 10-year loan[iii] at the average rate of 13%.  That means by the end of the 10 years, you would have paid over $10,000 in loan interest – on a $14,060 loan!

If you are considering buying a timeshare and you need financing, you may want to check out this article on Bankrate.com about taking out a personal loan to buy a timeshare.

Notes

[i] Interval Leisure Group Investor Presentation, August 2016, pg. 13.
[ii] Interval Leisure Group Investor Presentation, August 2016, pg. 30.  Number is for the second quarter of 2016 only.
[iii] According to ILG’s Form 10-Q for 3Q 2016, “The typical financing agreement provides for monthly payments of principal and interest, with the principal balance of the loan fully amortizing over the term of the related vacation ownership note receivable, which is generally ten years.”