Financing of DVC

[Lisa1976]

I know this is a fairly personal question so feel free to ignore me, but i was wondering how you all financed your DVC?

We have a few credit cards and a couple of loans already so we would be looking at another loan as we dont have a mortgage so thats not an option for us.

We wanted to do the DVC as soon as possible but i think we will struggle to get the finance.

 

[Hilary]

We paid on our cc, with our guide suggesting we did it in two or three monthly installments (interest free) if it was going to push our credit limit to do it in one go. We got lots of airmiles and then paid off the cc bills with a windfall we'd received.

I don't think DH would have wanted to buy the points if he'd had to arrange a loan. Have you looked into DVC's own financing arrangements? I believe their rate is higher than you may be able to get through a UK company, but it might be worth checking out as I'm sure DVC will make is as easy as they can for you to purchase!

 

[Miffy2003]

DVC do their UK financing through the Abbey National
We worked out the cost and it is very expensive to do it this way.

I have heard almost nobody gets rejected from DVC financing. The reason for this is it is very low risk for DVC. If you default (I don't mean you, I mean anyone!) they will simply cancel any bookings you have made to stay in DVC accommodation and resell your points - so no loss to them except for potentially a year's worth of points and some admin costs. I have seen people of on the US DVC boards with (according to them) very poor credit ratings being financed through DVC with no problems.

If you have any other questions, please feel free to ask and I will try and help

As for me, we paid for it on credit card at 0% interest and then paid off the CC with a big chunk of savings and took out a small loan (at a much lower cost than the DVC deal) for the rest (so we weren't keeping any balance on our CC)

HTH

Karen

 

[Lisa1976]

Unfortunately with us having three small credit cards already, I don't think we would get a fourth with a big enough limit to pay for it.

Thanks for your help though.

 

[mickg7dyd]

Hi,
At the time we purchased our first DVC points we took Disney finance with a 10% deposit as the rate was very competative at the time (we have since repaid the loan thanks to lots of overtime and a good exchange rate.) Our guide said as international buyers we were automaticaly approved as they had no way of of checking our credit history. We made our regular monthly payments by credit card (Disney just debit the same amount each month) and when we wanted to pay extra we just wrote to member services authorising the payment.

Mick.

 

[Lisa1976]

Thanks for that Mick, that might be the way to go for us then.

 

[gilld]

We did an equity realase on our house at an extremely low rate as we were doing some major works on the house. We lumped our DVC purchase (£13,000+) in with that. It made very little difference to our repayments as the rate was so good and we were borrowing quite a large sum anyway.

 

[Lisa1976]

Unfortunately we rent out house so we don't have an mortgage so that option is out for us. I might contact DVC to find out how much 150 points would be at SSR and take it from there.

 

[vernon]

I took out the DVC finance (again about 10% at the time) and paid it off a few months later. I knew the money was coming in so I wasn't too worried about taking on the "risk" at that time.

One thing that is worth thinking about is which currency you want the "debt" to be in. The dollar is very close to it's weakest point for many years, which means it is arguably a very good time to sell Sterling (pounds) to buy $ at the moment. If you hold the debt in US$ and the exchange rate were to return to it's 1.50 levels of not too long ago your debt would increase (in sterling terms) by about 20%, the debt (in sterling terms would decrease if it went to $2.50 per GBP1). What happens to the exchange rate does have a large impact on how much your investment eventually costs you, it is a factor that deserves it's due consideration.

 

[Lisa1976]

Sorry vernon, not too sure i understand. I thought that as they work in Dollars it stays in Dollars and we just work out the exchange each month that the payments come out.

Im not too sure what you mean by deciding what currency to have it in, sorry.

 

[Miffy2003]

Lisa,

When we were shown the DVC finance example the debt was converted to pounds and then paid off in pounds (ie the same amount every month for the term of the loan) so we knew it would be (for example) £160 per month for 5 years or whatever. The fluctuations of the exchange rate would not affect it once you'd been "set up" originally.

Seriously though you will pay over the odds if you finance through DVC - have you thought about consolidating all your o/s loans / CC's to get a good rate and put all your credit obligations in one place?

Cheers

Karen

Vernon is absolutely right in what he's saying. I would think carefully about putting it in dollars at the moment (if they still offer this option - we weren't offered it) as you could find your monthly payments increasing if the dollar returns to a more "normal" level (if there is such a thing!)

 

[Cinderella]

I don't know if you have made a decision on this yet, but I had to respond to your post. I would wait before buying DVC. You are already concerned that you might not be approved for credit and you say you have a few credit cards and loans already. By taking additional loan on for DVC - you will be putting an increasing burden on your cashflow. DVC is only part of the cost of a WDW trip and it would be a shame to put additional pressure on yourself, only to wind up not being able to afford to go.

If it were me - I would pay off your existing loans first - particularly the credit cards - by paying off one at a time - not the minimum balance, but as much as you can afford each month. By the time you have paid off these debts - you will have improved your cashflow and your credit rating, and you will be in a better position to purchase dvc - if you want to.

 

[Lisa1976]

thanks cinderella, thinks have changed dramtically for us since my original post, hence our purchasing of DVC. We do have the funds to buy it outright on a credit card but don't want to do this, hence the financing. We will be aiming to pay off within 3 years anyway but dont want to put the initial stress on ourselves of buying it outright.

I appreciate your concern though, thanks

 

[susieh]

We paid ours by money exchange sent by our bank. We took out a loan secured on the house (I guess there's no real difference to taking out an unsecured loan - it' still a loan) and the bank sent the money to Disney for us.

We had to pay a fee for the conversion and transfer - I can't remember how much it was but £80 rings a bell for some reason - that was for about £9,000 in 1996 (220 points)

 

[Miffy2003]

. We took out a loan secured on the house (I guess there's no real difference to taking out an unsecured loan - it' still a loan)

There is a huge difference! If you take out a loan secured on your property and default, the lender can (and usually will) place a charge on your property. I would never never never recommend a loan secured on your property for something like DVC. In theory you could be compelled to sell your house to repay the debt.

Obviously if you do not default on your loan there will be no issues.

 

[Merylj]

Hello, I was talking to a DVC rep last week - we still hav`nt committed yet, however he said if you get an email address from a current member you get 15% discount.
Sorry if you already know this - but I thought I would chime in!

 

[Cinderella]

Hi, I am just down the road from you, more or less, 9 miles south of Carlisle. If you want to use me as a referal just pm or email me.

 

[susieh]

There is a huge difference! If you take out a loan secured on your property and default, the lender can (and usually will) place a charge on your property. I would never never never recommend a loan secured on your property for something like DVC. In theory you could be compelled to sell your house to repay the debt.

Obviously if you do not default on your loan there will be no issues.

Sorry Miffy - I wasnt clear. Yes I agree there is a huge difference re default etc but I was meaning in the sense that borrowing is borrowing and getting the bank to send it as part of that deal.

We only even considered a loan for DVC as we had that money spare each month, our jobs were secure, we had adequate critical illness insurance etc etc.