The initial cost of purchasing a timeshare contract is higher than most people can afford to pay in cash. As such, the majority of signees look to timeshare loans to fund their purchase. However, there have been many cases in which these loans have been issued erroneously or even illegally, causing a great deal of financial and emotional stress.
You’ll have seen that the title of this blog is ‘The Good, The Bad and The Ugly’, but as usual, it’s likely to be much more the latter two than the first. There’s not a great deal of good to say about timeshare loans or timeshare refinancing. Both are ways to swindle those who can’t afford the big purchase they have often been harassed into.
A Word of Advice…
If you sit down with a timeshare salesperson and find yourself in a position of being offered a loan, your first thought should be that this means you cannot afford it. Unlike buying your home with a mortgage or getting finance for a new car, a timeshare is a luxury purchase. You would hardly take out a loan to buy a Lamborghini, so why should you take one out for a hotel room you’ll use for one week a year?
Equally, if you find yourself in a position where you think that you might need to refinance your timeshare, this is another sign that you simply cannot afford it. When you cannot afford to maintain a luxury purchase like this, it is time to find a way out, not bind yourself in for longer. Though you may feel like refinancing is your only option in order to continue to afford the timeshare, this is not the case. Before you take any further steps, contact the team at Timeshare.lawyer for advice as to what you should do, and whether there is a way out.
Examples of Timeshare Loan Malpractice
As we mentioned above, there have been several cases of timeshare loans being issued in ways that should not have happened. We covered some of these timeshare loan scandals in this post from 2017. In short, these loans should never have been granted.
One financer of timeshare loans, Shawbrook Bank, admitted that it had failed to perform due diligence before granting loans for holiday ownership products with Diamond Resorts. Over £9 million had to be set aside to cover defaults on these loans, which were issued to people who could not afford them.
Barclays Partner Finance also came under fire for issuing large loans to people who could not afford them, and basically failing to perform due diligence in the same way that Shawbrook had. Barclays Partner Finance, who work with Silverpoint and also finance loans for vehicles and other purchases for people with poor credit, are unscrupulous in who they approve, and have no qualms about pursuing them when it inevitably transpires they are not in a position to pay.
Timeshare resorts working with these finance companies have also been found at fault for falsifying information on finance forms to encourage them to be approved. This action effectively coerces signees into committing fraud without their knowledge.
How Do I Decide What’s Best?
When considering a loan for timeshare or the idea of refinancing timeshare, it is important to begin by asking yourself one simple question: if you applied for this loan at your normal bank, would it be approved? If the answer is NO, then you should stop right there.
It may be tempting to accept credit, particularly when you know there’s scant chance of getting it elsewhere, but there’s a reason why reputable banks do not approve loans on certain applications. The reason comes down to your own financial protection. They’re not just looking after their own interests (knowing that if you default they stand to lose money), they are also making sure you don’t damage your own financial life with a poor credit decision.
I already have a timeshare loan… help!
If, however, it’s too late for you and you’ve already embroiled yourself with a tenacious and unaffordable timeshare loan agreement, then you should take action. Where it can be proved that the loan was issued erroneously (whether deliberately or not) you may have a case against your creditor or the timeshare resort you signed with. This is even more likely if the loan is being handled internally by the timeshare resort or company itself.
To be sure of your rights and what you can do to improve your finances in the face of timeshare, be sure to drop Timeshare.lawyer a line and talk to a member of our team of timeshare experts. We’ll be able to talk you through your options and assess what the best course of action is for you, and to help you along the way should a legal case be necessary.