Tax Deduction

Loan interest such as interest on consumer loans, mortgage interest or interest on credit card bills can be deducted from income in the tax bill. This reduces the taxable income (so-called tax deduction). As a result, less tax has to be paid by taking the interest on loans into account for tax purposes.

In contrast, the instalments for a lease cannot be deducted. The different tax treatment of loan costs (interest) and leasing costs (rent) leads to a more positive assessment of personal loans in many comparisons, even if they are offered with a higher "interest".