Personal Interest


DEFINITION of 'Personal Interest'

Interest that taxpayers pay on personal and consumer loans. Personal interest is nondeductible, and the rates charged for this type of interest are often quite high. Personal interest that is received by the lender is usually reported on a cash basis.

BREAKING DOWN 'Personal Interest'

Personal interest includes interest on car loans, credit cards, loans for appliances and furniture and interest on loans made by one person to another.

Many consumers elect to take out lines of credit on the equity in their homes so that they can pay off their personal-loan balances and deduct the interest on their lines of credit instead.

  1. Interest

    The charge for the privilege of borrowing money, typically expressed ...
  2. Deduction

    Any item or expenditure subtracted from gross income to reduce ...
  3. Unsecured Loan

    A loan that is issued and supported only by the borrower's creditworthiness, ...
  4. Line Of Credit - LOC

    An arrangement between a financial institution, usually a bank, ...
  5. Loan

    The act of giving money, property or other material goods to ...
  6. Taxes

    An involuntary fee levied on corporations or individuals that ...
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