In principle, all loans entail a cost that the lender charges in the form of interest. It is only through interest that the lenders are allowed to withdraw the money that they should have for
In principle, all loans entail a cost that the lender charges in the form of interest. It is only through interest that the lenders are allowed to withdraw the money that they should have for their own profit. All other fees, such as the newspaper fee and the set-up fee, should only be used to cover their costs. Since the costs that are directly linked to your loan are often relatively low, the major part is that you get to pay interest.
This is something positive for you as you get a deduction of 30% of these costs. Say that you pay USD 100,000 in interest for one year, then you will get back 30,000 when you declare.
This applies no matter what type of loan you have
Thus, you will get back 30% if it is a small micro loan in the same way as the large mortgage loans. In the case of micro-loans, however, one should be aware that a fairly large part of the cost can be in the form of fees which must not be deducted. Therefore, look up what the lender writes about the breakdown between fees and interest.
A lender who takes a higher total price may be cheaper after the deduction if a larger part of their price is interest compared to the slightly cheaper lender.
One important thing to know about is that you only get back 30% of interest costs for interest that amounts to a maximum of USD 100,000. If you pay more than that in interest each year, you will only get back 21% on the excess amount.
Most often, this deduction is handled by itself
As the lenders submit control data to the tax office which then reprints them on your tax return. But as always, it is worth checking that these figures are correct, otherwise you risk missing out on getting money back.
If you have, for example, mortgages where you know in advance how much you will be able to pay in interest during the year, there is the opportunity to apply for an adjustment to your tax.
In short, your employer will pay less tax and you will receive a larger portion of the salary instead. You can read more about this at the Swedish Tax Agency.