DVC Financing Options for Resale Buyers
While paying cash for DVC provides the best long-term value, many buyers need financing to purchase their desired point allocations. Understanding financing options for resale purchases helps you make informed borrowing decisions that align with your financial situation and ownership goals.
DVC Resale Financing Challenges
Traditional mortgage lenders typically don't finance timeshare purchases, viewing them as higher-risk consumer debt rather than secured real estate. This limits financing options compared to regular home purchases and often results in higher interest rates and shorter loan terms for DVC buyers needing to borrow.
Specialized Timeshare Lenders
Several lenders specialize in DVC and timeshare financing, offering loans specifically designed for vacation ownership purchases. These specialized lenders understand DVC value propositions and contract structures, streamlining approval and funding processes compared to general consumer lenders unfamiliar with timeshare properties.
Interest rates from timeshare lenders typically range 7-12% (as of 2025) depending on credit scores, down payments, and loan terms. Loan amounts usually cap at $25,000-50,000 with repayment periods of 5-10 years. Some lenders require minimum 10-20% down payments to qualify for financing.
Home Equity Loans and Lines of Credit
Homeowners with sufficient equity sometimes use home equity loans or HELOCs to finance DVC purchases, securing significantly lower interest rates (often 5-8%) compared to unsecured timeshare loans. This approach converts DVC financing into secured debt against your primary residence at more favorable terms.
However, using home equity for vacation ownership increases risk - defaulting could jeopardize your home rather than just your DVC contract. Only use home equity for DVC if you're confident in your ability to repay and comfortable with securing vacation ownership debt against your primary residence.
Personal Loans
Personal loans through banks or credit unions offer another financing path, though rates typically exceed specialized timeshare lenders (often 8-15% depending on creditworthiness). Personal loans provide unsecured financing without collateral requirements, making them accessible to buyers without home equity but resulting in higher rates reflecting increased lender risk.
401(k) Loans
Some buyers borrow against 401(k) retirement accounts to finance DVC purchases. While this avoids external lender interest charges (you "pay interest to yourself"), 401(k) loans carry significant risks including tax penalties if you leave your employer before repayment completes, lost investment returns on borrowed funds, and reduced retirement savings growth.
Financial advisors generally discourage using retirement funds for vacation ownership due to long-term retirement security implications. However, for some buyers with strong retirement savings and stable employment, 401(k) loans offer low-cost financing unavailable through traditional lending channels.
Calculating Total Financing Costs
Before financing, calculate the total cost including interest over the full repayment period. A $20,000 loan at 10% interest for 7 years costs approximately $6,000 in interest, increasing your true DVC cost to $26,000. Compare this to the value of vacations you'll enjoy during the repayment period to ensure financing makes economic sense for your situation.
When to Finance vs. Save
Financing makes sense when DVC vacations during the repayment period exceed the total costs including interest, or when immediate access to DVC creates family memories worth the financing premium. However, if you can save for 1-2 years and pay cash, eliminating financing costs provides better long-term value and reduces ongoing financial obligations beyond annual dues. Evaluate your personal financial situation, vacation urgency, and comfort with debt when deciding whether to finance your DVC purchase.