Tax Refund Loan
In the past, tax refund loans were billed as instant refunds for a good reason. The taxpayer would get a portion of their refund back nearly as soon as they filed their taxes. In some cases, it would take an additional day or two. Still, it was a far shorter time period than the IRS would normally take to send the refunds.
While the U.S. federal government continues to look at putting restrictions on the practice of tax refund loans, the process is still legal. Therefore, for those who want to take advantage of it, simply ask your tax preparer if the company they are with offers these types of loans. Not all tax preparation companies have tax refunds available, but most national chains will. It is important to know what services are offered by your tax preparer before having them take care of your taxes.
Some Car Title Loans providers allow you to pay off the loan over a 32-month term. Better than that is that you may not penalized if you chose to pay offyour loan sooner. Whereas in an anticipated tax refund loanthe fees are automatically taken from your income tax refund before you receive your refund. And fees are never waived with an anticipated tax refund loan.
One of the many dangers with obtaining ananticipated tax refund loan is that the lender may intentionally increase theexpected income tax refund amount in order to increase the amount of fees they charge. Thiscreates problems for theconsumerwhen their expected income tax refund they actually receive is less than anticipated since the lender has already contracted for and deducted their fees from the consumers income tax refund.Additionally, this puts the consumer at risk of being audited by the IRS for filing an incorrect income tax return. These andother risks are reasons thegovernment is considering legislation to restrict anticipated tax refund loans because they promotefraudulent activities.