Consumer Interest

Interest paid on consumer loans. Consumer interest is paid on credit cards, bank lines of credit, retail purchases, car and boat loans, and educational loans. Since the end of 1991, such interest is no longer deductible for tax purposes, based on provisions of the Tax Reform Act of 1986. That tax law distinguished nondeductible consumer interest from other forms of interest which can be deductible, including business interest, investment interest, and mortgage-related interest.