You have probably seen the signs outside some tax preparation loan businesses. Maybe you have even seen the guy dressed up in a crazy costume trying to get your attention while driving down the road. Many of these tax services offer same day tax refunds to their clients. Don’t be fooled, it comes with a fee and sometimes a hefty fee.
In the past, refund anticipation loans (RALs) drew in millions of cash-strapped consumers to get very high-interest loans for up to the estimated amount of their refunds. Because of recent federal regulations RALs have been stopped. However, many tax services have found ways around the RALs. For example, some are offering Personal lines of credit not based on the anticipated tax return amount. These loans typically range from $200 – $1000 and include monthly fees as well as interest rates as much as 35%!!!
Some tax services have partnered with PayDay Loan lenders. They will basically give you a PayDay loan until you get your tax return. As you can imagine the fees and interest rates for these types of loans will be through the roof!
More than likely you have waited all year for your tax refund. Even if you have to wait another 2 – 3 weeks, it’s worth the wait. Don’t waste your money on the fees and astronomical interest rates.