Credit, how to get a tax deduction?

Did you know that a loan allows y or to reduce the amount of your taxes? Here is a brief summary of what you need to know to benefit from this reduction.

 

What can you deduct?

What can you deduct?

If you have a private credit contract in progress, this means that you have agreed to repay a fixed minimum amount each month. This amount consists of two elements:

  • reimbursement of the amount borrowed
  • as well as an interest

This interest is deductible from your taxes. Indeed, registered in your tax return, it comes to decrease your taxable income and lowers the total amount of your taxes, thus allowing you to profit from an advantageous reduction.

 

How do you know the amount of interest you paid during the year?

How do you know the amount of interest you paid during the year?

It is possible that the contract of your credit does not mention the breakdown between repayment and interest. It can also vary by bank.

However, during the months of January to March, the financial institution that granted you the loan must send you a certificate of interest for the year before.

If you do not receive this certificate, you can request it free of charge from the bank, or from your service provider. Lite Lending provides you with this document free of charge in case you have not received it and takes care of the necessary procedures for you.

 

Is the tax reduction substantial?

tax loans

This gain depends on the situation of each and various criteria, such as the tax rate and the amount of interest you paid, which is defined according to the conditions of your credit agreement (interest rate, duration of the contract and amount borrowed).

In any case, you will not lose anything, and it will necessarily be a reduction. It would therefore be a shame to deprive yourself of it.

 

A concrete case: credit or leasing?

credit or leasing?

You have to buy a car and hesitate between leasing or credit. It is true that leasing presents a more interesting interest rate at the base, but unlike credit, its interests are not deductible from your taxes.

Indeed, leasings are considered as rentals and not as loans. As such, they are not deductible from your taxes.

In the case of a loan, you deduct the interest paid and also have the advantage of owning your vehicle upon purchase.

You can thus make all the choices concerning it. For example, you can choose your insurance coverage and make substantial savings, compared to leasing which requires you to have a full cap.

In addition, with credit, you have no risk of costs for exceeding the mileage or for early termination of the contract.

It is therefore interesting to study the question carefully before making your choice between a private loan and a car leasing.

If you would like to find out more about the different financing options available for a vehicle, this article might be of interest to you.

 

Your credit with Lite Lending

credit loans

Lite Lending processes your credit request in a few minutes, free of charge and without obligation, looking for the best rate and the best solution, and gives you an answer within 24 hours.

We work with all banks in Switzerland, to be sure to immediately contact the right bank, and get the best offer.

With private credit, you receive the money in your account, and you are free to do what you want with it.

Tips for obtaining cheap consumer credit

For any project, funding is the most important point to be able to set it up. Most often, the use of consumer credit is the classic solution adopted. But today, given the proliferation of offers and credit institutions, the question arises, how to get cheap consumer credit? Here are some prerequisites to remember.

 

Choose a form of consumer credit corresponding to your needs

consumer credit corresponding to your needs

For information, there are three main variants of consumer credit. If you already have a specific project in mind to finance, you can opt for the first form of consumer credit, which is the so-called affected credit. In this case, the use of funds will be specified in the loan contract, in particular the particular project to be financed.

On the other hand, if there are many projects that you want to finance, you can opt for an unrestricted personal loan. In this case, you are free to use the funds for projects of any kind. And finally, as part of the consumer loan, you can also opt for revolving credit. It is a cash envelope, offered at a variable rate and with a monthly payment that you can modify during the loan.

In addition, care must be taken to determine the amount of its funding in advance to facilitate research.

 

Compare consumer loan offers before choosing

In the field of credit, you have to know how to compete. Of course, the first reflex is to consult your banker who is already aware of your situation. This is not a bad thing in itself, in addition, it could decide to make you a loyal customer award. However, don’t stop there, also shop around at other credit agencies. It is necessary to take note of the offers and their modality, but also of the rate of interest rate which is practiced.

In addition, you can use certain tools such as simulation or online credit comparison to help you find an offer that fits your needs.

 

Negotiate the cost and terms of your consumer credit

consumer credit

This is a really crucial step, for which you must be prepared. In general, after a credit simulation, if you decide to subscribe to a particular offer, this offer will be sent to you by the bank. On the day of negotiation, you will come with the proposed offer in hand. On the other hand, do not rush, you must let the agent of the organization explain for himself what he offers you. If this is not the best rate, then the negotiation phase will take place. This includes negotiating the proposed rate. Show the agent that you are aware of what is generally done and even what is offered elsewhere. The competition will play on its own as well. Better offers will be offered to you.

 

Take advantage of different promotions

Take advantage of different promotions

There are certain times of the year when all the organizations rush to offer promotions on consumer loans. Take advantage, because these are special offers in which, the rates are usually broken. In principle, most often, promotions take place in summer for the holidays, in spring, at Christmas or even at the start of the school year.

However, watch out for scams. When rates are too low or strangely low, you still have to beware. Also pay attention to the zero rate loan, because often this zero rate will only be valid for a fixed term of your loan.