DEFINITION of 'Consumer Interest'

A type of interest that is charged for personal loans, including automobile loans and credit card debt. This type of interest constitutes all forms of nondeductible interest that consumers must pay. It excludes deductible interest such as mortgage interest.

BREAKING DOWN 'Consumer Interest'

Consumer interest is considered the worst kind of interest because it is not deductible and is typically charged at a higher rate than other types of interest. For this reason, many consumers have turned to home equity loans as a means of converting their nondeductible consumer interest debt into deductible mortgage interest.

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RELATED FAQS
  1. Are personal loans tax deductible?

    Find out whether interest on personal loans is tax deductible and what types of loan interest can be used to reduce your ... Read Answer >>
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    A variable interest rate loan is a loan in which the interest rate charged on the outstanding balance varies as market interest ... Read Answer >>
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