Did you know that some types of loans let you deduct the interest costs from your taxes, like mortgage interest? If you’re paying off a loan, you might be wondering “Are personal loans tax deductible?” or, more specifically, if interest from a personal loan is tax deductible.
This article can help you better understand how personal loans work and if interest could be deducted. However, it’s important to understand that this isn’t tax advice, just information.
Your best bet is to consult a tax professional for answers to your specific questions. In the meantime, this guide can help you come up with what you might need to ask once you visit that tax professional.
What Counts as a Personal Loan?
How does it work? You borrow money from a creditor-such as a bank, credit union, or online lender-and agree to loan terms to pay it back.