Financing Costs Now, most folks who buy timeshares don’t have $20,000 just lying around, so they wind up financing the initial purchase price. That means they make a down payment and turn the remaining amount into debt that they pay off in monthly installments. It’s just like a car loan or a student loan—but way worse. Why? Because timeshare financing usually carries a ridiculous interest rate. Take Disney Vacation Club as an example. While they advertise interest rates that start at 10% (which is still terrible, by the way), the fine print will tell you that some members could get slapped with an 18% interest rate! That’s almost as bad as credit cards—which, for comparison, have a 20.4% average interest rate. So, while a monthly payment of $400–500 may not sound like a big deal, you’ll be racking up interest the whole time. That’s a huge part of how these companies make money. Closing Costs Are you ready to pay your initial purchase fee and jump into vacationing? Hold your horses, partner. There’s still more money to fork over. Next, you’ll pay closing costs to finalize the sale of the club membership or timeshare. And closing costs aren’t cheap—close to $1,000 in some cases. For example, Disney Vacation Club sometimes charges over $850 for closing costs. There aren’t even this many hoops to jump through at the National Dog Show! Maintenance Fees One of the “perks” of owning a timeshare or club membership is that, even though you technically own part of the property, you don’t have to worry about cleaning or other maintenance when you’re not using it. It seems like a great benefit, but don’t think for a second you won’t pay for it. Maintenance fees are timeshare and vacation club companies’ way of charging you for the upkeep of their properties, and these suckers are expensive. The average timeshare annual maintenance fee is a whopping $1,000. Here’s the kicker with maintenance fees: You have to pay them as long as you own the timeshare. That’s right—even if you pay cash for your timeshare or membership, or pay off your loan, you’ll still owe annual maintenance fees.
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