What Is a Tax Advantage Loan?

A tax advantage loan is a consumer loan in which the interest paid on the loan is reported to the IRS as a deductible. The reason it can be deducted on your tax return is because your home is put up as collateral.

  1. Paperwork

    • When you apply for a tax advantage loan, you must present several documents: Deed of Trust, mortgage statement and personal property tax statement.

    Eligibility

    • This type of loan is only available to home owners.

    Amount

    • The loan amount cannot exceed the amount of the personal property that is being financed. Typical purchases would be automobiles, boats or motorcycles.

    Refinancing

    • If you have a loan against a vehicle now, you may find it advantageous to refinance with a tax advantage loan.

    Appraisal

    • A home appraisal is not necessary to qualify.

    Availability

    • Check with your local bank or credit union. Shop around for the best interest rate.

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