Two Valid Approaches
There's no universally "right" way to pay for a DVC resale contract. Some families save up and pay in full. Others finance the purchase and spread payments over several years. Both approaches have legitimate advantages, and the best choice depends entirely on your financial situation.
Let's break down the real numbers so you can make an informed decision.
The Case for Paying Cash
The most obvious benefit of paying cash: you own your contract free and clear from day one. No monthly loan payments, no interest charges, no lender to deal with.
For a typical resale contract (let's say 160 points at Animal Kingdom Villas for $140 per point), that's $22,400 plus closing costs. If you have that amount available without touching your emergency fund or retirement accounts, paying cash is financially efficient.
The savings on interest are real. A $22,400 loan at 12% over 10 years costs about $16,100 in interest. That's money you keep in your pocket by paying cash.
Cash also means:
- No credit check or application process
- Slightly faster closing (no lender approval wait)
- One less monthly bill to track
- Complete flexibility to sell without a lien
The Case for Financing
Financing isn't about not being able to afford something. It's about choosing how to allocate your money. Here's why many financially savvy buyers choose to finance:
Preserving liquidity. Dropping $20,000+ on a single purchase can leave your savings thin. Life happens. Cars break down, roofs leak, jobs change. Keeping cash reserves intact provides a safety net that's worth something.
Opportunity cost. If your savings earn 5% in a high yield account while your DVC loan costs 12%, financing still costs you 7% net. But if that cash is your only safety net, the peace of mind may be worth more than 7% to you.
Starting vacations sooner. Many families would need to save for 2 to 3 more years to pay cash. Financing lets you start using your points now, which means 2 to 3 additional years of DVC vacations. Those memories have real value.
Financing also means:
- Lower upfront cost (just the down payment, typically 10% to 20%)
- Predictable fixed monthly payments
- No prepayment penalties with most lenders
- You can pay it off early whenever you want
A Real Comparison
Let's look at a $20,000 DVC contract both ways:
Pay Cash
- Total cost: $20,000 (plus closing costs around $500 to $800)
- Monthly cost going forward: just maintenance fees (roughly $7 to $12 per point annually)
- Time to start vacations: as soon as closing completes
Finance with 10% Down, 7 Year Term at 12%
- Down payment: $2,000
- Loan amount: $18,000
- Monthly payment: approximately $317
- Total interest paid: approximately $8,600
- Total cost: $28,600 (plus closing costs)
- Cash kept in savings: $18,000
The financing route costs $8,600 more over 7 years, but you keep $18,000 liquid. Is that trade off worth it? Only you can answer that.
The Hybrid Approach
Some buyers split the difference. They make a large down payment (40% to 50%) and finance the rest over a short term like 5 years. This reduces interest costs while still preserving some cash.
For our $20,000 example with 50% down and a 5 year loan at 11%:
- Down payment: $10,000
- Loan amount: $10,000
- Monthly payment: approximately $217
- Total interest paid: approximately $3,020
That's a much smaller interest cost while keeping $10,000 available for other needs.
Questions to Ask Yourself
There's no judgment either way. Just be honest with yourself about these questions:
- After paying cash, would I still have 3 to 6 months of expenses saved?
- Am I pulling from retirement accounts or investments that are earning returns?
- Would financing let me purchase sooner, giving my family more years of vacations?
- Can I comfortably handle the monthly payment alongside maintenance fees?
Use our instant quote tool to see exact payments for your specific contract. And if you want to understand the full process, our how it works page walks through every step. You can also apply directly if you're ready to move forward with financing.