New Loan Tax Rules from 2025 Set to Increase Costs for Borrowers

Starting from the 2025 income year, significant changes in Swedish loan regulations will reduce and ultimately eliminate the ability to deduct interest expenses on certain unsecured loans, impacting many borrowers' personal finances. Financial expert Christina Sahlberg from Compricer explains that starting in 2025, individuals may only deduct half of their interest expenses, and by 2026, no deduction will be available at all. This change affects loans such as unsecured blancolån, kontokrediter, and avbetalningsköp, making these already expensive loans even costlier.

Sahlberg highlights the need for borrowers to scrutinize their unsecured loans carefully and consider refinancing options to mitigate increased costs. For example, converting a blancolån used for a car into a billån could still allow a deduction of 30% on interest. Another potential strategy is borrowing more against a mortgage, although this requires attention to amortization obligations.

These regulation changes aim to curtail the tax advantage on unsecured high-interest loans, but borrowers may face financial strain if they do not adjust their borrowing strategies. While many assume such loans are mainly taken out by those in poor financial situations, Sahlberg clarifies this is a misconception, as a range of borrowers utilize these credit forms.

The upcoming elimination of interest tax deductions is vital for borrowers to know, so they can protect their finances from the impact of rising borrowing costs after the year-end transition.