Are personal loans tax deductible?

No, personal loans are not tax deductible outside of a handful of exceptions. There are some cases when the interest on a personal loan—but not the principal repayment—might be deductible, depending on what the loan was used for.

The three main examples are if you use a personal loan to fund qualified higher education expenses, as it can potentially meet the IRS’s definition of a student loan. You could also potentially deduct your personal loan interest if you use a personal loan to start or fund a business. Finally, if you use the loan to buy investments in a taxable brokerage account, the interest is deductible, just as margin interest is (although borrowing money to invest is almost never a good idea).

Related articles

What Is a Lien on a Car?
How Much Do Tires Cost? What To Expect and How To Save
No-Credit-Check Personal Loans: What’s the Catch?