Timeshare Loans: Can You Finance Timeshare Purchases?

It can be tempting to buy a little piece of paradise that you and your family can escape to once a year. But timeshares don’t come cheap, and many interested buyers simply don’t have the thousands of dollars on hand to pay for a timeshare up front. 

Fortunately, there are ways to finance (and refinance) a timeshare. Your options include timeshare loans, personal loans, home equity loans, and low- or no-interest credit cards. 

Here’s what you need to know about how much it costs to get a timeshare and how to get timeshare financing at a rate you can afford.

Key Points

• This popular vacation ownership model allows multiple buyers to purchase the rights to use a property for a specific, recurring period each year.

• Owners share costs, including a large upfront purchase price and annual maintenance fees.

• Shared deeded and shared leased are the two main timeshare types.

• Usage structures include fixed week, floating, and points-based systems.

• Timeshares generally depreciate significantly in value, with resale prices on the secondary market being much lower than the original purchase price.

What Is a Timeshare?

A timeshare is a way for multiple unrelated people to own a fractional share of (or the right to use) a vacation property, which they take turns using, typically in week-long increments. Because you share the costs with other people, it’s generally much cheaper to purchase a timeshare than to buy a vacation home of your own.

Timeshare properties are typically located in popular travel destinations, from tropical beaches to ski resorts. And you don’t necessarily have to go to the same place each time. In some cases, you can trade your property for another location, though there may be additional fees and costs.

How Does a Timeshare Work?

How a timeshare works will depend on the type of timeshare. Here are three common setups.

Fixed Week Timeshare

A fixed week timeshare is what most people likely think of when they think about timeshares. Fixed week timeshares guarantee owners use of a specific property the same week each year. Some timeshare owners prefer this type of ownership because it comes with no competition.

Floating Week Timeshare

Floating week timeshares allow owners some flexibility when they can use their timeshare each year. It depends on the unit’s availability, but owners can typically choose from any week during the year. 

Point System Timeshare

Instead of a set amount of time each year, a point system timeshare offers points each year that owners may save up as they see fit. These usually come with a number of properties for timeshare owners to choose from, and each property may cost a different number of points depending on its location, size, and requested time of year.

Types of Timeshare Ownership

A timeshare allows you to split the costs of vacation homeownership with others based on the timeshare agreement. There are two main types of timeshare contracts.

Shared Deeded Ownership

With shared deeded ownership, you hold a deed to a fractional piece of the timeshare property. For example, if you purchase a week’s worth of vacation at a given property, you own 1/52 of the property (since there are 52 weeks in a year). Ownership lasts indefinitely, but owners can typically sell, bequeath, or gift their ownership. This arrangement is less common today than when the industry started out decades ago.

Shared Leased Ownership

When you buy a shared lease ownership, you don’t actually own any part of a property outright. What you’re buying is the right to use a property, or a group of properties, for a fixed or floating week (or weeks) each year for a certain number of years. This type of timeshare ownership doesn't last forever. A beneficiary may inherit the remaining term, but only for the remaining contract term. 

Are Timeshares Good Investments?

Timeshares are typically poor investments. Unlike real estate, timeshares often depreciate in value over time. They’re difficult to resell and often sell for much less than the original purchase price. A better investment would be to purchase a vacation property and rent it out when not in use.

However, if you like the idea of visiting the same location each vacation, can take a week off work each year, and can use the timeshare for 10 or so years, owning a timeshare can end up being less costly than paying for a hotel for all those vacations.

Recommended: How to Use Debt to Build Wealth 

How Much Do Timeshares Typically Cost?

There are several costs involved in buying a timeshare. This includes the initial purchase, which is the biggest outlay. The average transaction price of a timeshare interval in 2024 was $23,160, according to the American Resort Development Association.

In addition, you should expect to pay annual maintenance fees (which can run around $1,480, depending on the size of the property). These fees tend to increase over time due to inflation. If you have a deeded timeshare, you'll pay these costs indefinitely. If you want to switch locations, you’ll typically have to pay exchange fees.

When purchasing a timeshare, it’s a good idea to ask about your all-in costs per year and when you'll pay them. Some resorts require you to pay quarterly or twice per year.

Is There a Way to Save Money on Timeshare Ownership?

Yes. The primary way to save money on a timeshare property is to buy from a previous timeshare owner. Because timeshares rarely appreciate in value, you can end up spending far less for a timeshare on the secondary market than one that you buy new directly. Timeshares often sell for half the original purchase price, and sometimes for far less. Just make sure you understand what ongoing fees come with the purchase.

Can You Borrow Against a Timeshare?

Generally, no. Timeshare ownership usually doesn’t come with actual ownership of the property. And even when it does, timeshares generally decline in value over time. As a result, you typically can’t use a timeshare as collateral to secure another loan. 

Financing Options to Pay for a Timeshare

People selling timeshares will often connect buyers with partner lenders that offer timeshare loans. But beware: these offers often come with very high interest rates, especially for buyers with lower credit scores. Fortunately, they’re not your only option for financing a timeshare. With some advance planning, you can find alternative financing options. Here are some to consider.

Home Equity Loan

If you’ve built up a fair amount of equity in your home, you may be able to get a home equity loan to purchase a timeshare. Though home equity loans are primarily for carrying out home improvements that will increase your home’s value, you can also use them for timeshare financing. 

The benefit of choosing home equity loans vs. personal loans is that home equity loans typically come with lower interest rates since they are secured by the equity in your home. Keep in mind, however, that if you fail to pay back your loan, your lender could seize your home to recoup their losses.

Credit Card

Though credit cards often come with high interest rates, some cards offer a promotional 0% annual percentage rate (APR) period, which can be as long as 18 months. If the initial down payment on a timeshare is something you can pay off within this time frame, it could be a good financing option. Keep in mind, though, that if you don’t pay off the balance before the introductory rate expires, you could end up paying a higher interest rate than the one the developer offered. 

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Timeshare Personal Loan

If you have a strong credit score, an unsecured personal loan will often cost you less over the long run than a timeshare loan through the developer. While interest rates for personal loans can be higher than rates for home equity loans, you’ll likely find a loan with a lower rate than the rates the timeshare sales agent offers. It’s also possible to get personal loans with fair credit (which are scores around 580 to 669). Because this type of loan doesn’t require any collateral, your primary home won’t be at risk in the event of default.

To find out what rates you might qualify for — and determine if a personal loan is a better deal than a timeshare loan — it can be a good idea to use a loan comparison site to get preapproved for personal loans. 

Benefits and Drawbacks of Timeshare Loans

When you purchase a timeshare, the developer may offer you a timeshare loan to make the initial cost more manageable. There are both pros and cons to financing a timeshare this way. Here’s a look.

Pros of Timeshare Loans

• You can apply for a timeshare loan directly from a lender that works with the timeshare sales team, so there’s no delay in securing financing and completing your purchase.

• Timeshare loans tend to have long repayment terms, which leads to low monthly payments.

• Timeshare loan lenders understand timeshare costs and can provide loans large enough to finance the timeshare.

Cons of Timeshare Loans

• Timeshare loans typically come with very high interest rates.

• Long repayment terms usually lead to higher overall loan costs because you can end up paying more interest over the (longer) life of the loan.

• Timeshare properties don’t provide any return on investment and become even more expensive if you take out a costly loan.

Are Timeshare Loans Secured?

Not typically. A secured loan involves putting up an asset as collateral. However, you can generally secure a timeshare loan if you opt to use a home equity loan to finance (or refinance) the purchase. This type of loan is secured against the value of your home equity.

Since collateral reduces risk for a lender, secured loans tend to come with lower interest rates than unsecured loans. 

Keep in mind that you can’t use the timeshare you’re purchasing as collateral for the timeshare loan.

Can You Refinance a Timeshare Loan?

Yes. If you have a high-interest timeshare loan, you may be able to refinance it. When you refinance a loan, you apply for a new loan with a lower interest rate. Once you receive approval, you can use the new loan to pay off your existing one. You may also benefit from smaller or fewer monthly payments. 

You have several options for timeshare refinancing. These include personal loans, home equity loans, and 0% introductory APR credit cards. It may also be possible to work with your existing lender to remodel your loan.

The Takeaway

You can finance timeshares with personal loans, home equity loans, credit cards, or even specialized timeshare loans from the timeshare developer. It’s also possible to refinance timeshare loans if necessary. The total costs of each timeshare vary, so it’s imperative to understand exactly what you’re initially spending and what you’ll continue to spend as the years go by.

With our online lending tool, you can quickly compare personal loan offers that match your financing needs and qualifications.