What is 'Absolute Interest'

Absolute interest means having full ownership or the total and complete rights to an asset. Absolute interest can be held on assets such as real estate, jewelry or vehicles, to name a few. It indicates that the owner's interest is not diluted by or subject to another party's ownership, nor is it dependent on conditions that must be fulfilled. An individual with an absolute interest has both legal and beneficial possession of an asset or property, meaning that person has the sole right to legally possess the asset and receive benefits from it.

BREAKING DOWN 'Absolute Interest'

Absolute interest is similar to vested interest. Vested interest refers to the complete right to benefit from the property in question at some point in the future, while absolute interest refers to complete rights in the present. Absolute interest is the opposite of a contingent interest. Contingent interest confers an ownership interest only upon the fulfillment of certain conditions or the occurrence of specific circumstances.

An absolute interest in an asset or property gives the owner full entitlement to the benefits and privileges that accrue from such ownership. An example of an absolute interest would be the direct ownership of a vehicle. A buyer's purchase of a vehicle by transferring his or her own assets or money to the seller in exchange for the vehicle, without the use of credit from a lender, results in an absolute interest in the vehicle for the buyer. The buyer is not bound by a lender to pay off a loan, meaning there are no other parties with an interest in the vehicle. With an absolute interest in the vehicle, the buyer is free to do what he or she would like with it, including driving it, renting it or even destroying it.

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