Consumer Interest

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. Can personal loans be transferred to another person?

    Personal loans cannot be transferred to another person, because these loans are determined based on your unique credit score ... Read Full Answer >>
  2. Are personal loans considered income?

    Personal loans are not considered income for the borrower unless the loan is forgiven. In other words, you cannot be taxed ... Read Full Answer >>
  3. Can personal loans be included in bankruptcy?

    Personal loans from friends, family and employers fall under common categories of debt that can be discharged in the case ... Read Full Answer >>
  4. Are personal loans tax deductible?

    Interest paid on personal loans is not tax deductible. If you take out a loan to buy a car for personal use or to cover other ... Read Full Answer >>
  5. Are personal loans bad for your credit score?

    Taking out a personal loan is not bad for your credit score in and of itself. However, there are several factors that come ... Read Full Answer >>
  6. Can Sallie Mae loans be forgiven?

    Sallie Mae loans, similar to other private loans, cannot be forgiven. As of 2015, there is no option for private student ... Read Full Answer >>
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