About Tax Refund Loans & Cash Advances

Beneficial Information About Tax Refund Loans

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Many taxpayers who use accountants or tax preparation services to file their tax returns for them are frequently given their money in two different ways when they file electronically: The “tax refund loans” or standard “rapid refunds”. Tax refund loans are becoming more difficult to find and qualify for. You may be wondering which of the two of these is better? Why would I choose one over the other? Which one should I do and which would should I not do? You may be surprised at the answer.

E-Filing Tax Returns And Tax Refund Loans

Some people call Tax Refund Loans “grasp lending”. This is because the professional tax preparer or tax service firm actually loans the money out through means of their affiliation with a financial lender institution who is the actual lender that offers and sponsors the specialty tax loan product through the tax service. The potential tax refund loan candidates are within the tax preparers grasp since they are already being provided other tax related professional services. Usually the tax preparer or accountant acts as an administrator on behalf of the actual lending company as a way for the tax preparer to add to their revenues and the lender benefits by having a tax professional provide contract oversight. The tax preparation service makes sure the tax return is accurate, legit and that the taxpayer meets all the requirements for the “tax refund loan“. During the loan application and completion of the tax refund loan process one of the things you will end up doing is that you will assign and transfer your claim to your pending refund money over to the lender. The lender is then repaid with the anticipated IRS refund money.

When the tax preparer completes your return and electronically sends it to the IRS, they are counting on the fact that you will actually receive that particular amount of money. Somewhere around 10% of taxpayers choose “Tax Refund Loans” so that the money can be in their pockets almost immediately rather than wait 10 to 18 days for the IRS to issue the standard “rapid refund” if you file electronically and do not obtain a tax refund loan.

Tax Refund Loan Money

However, there is a fairly high cost related to tax refund loans. Although it will only be about 10 to 18 days before the tax preparer receives the taxpayer’s refund money, they will charge a high rate of interest and or fees for this short term personal loan. Although the cost is relatively high, many taxpayers obviously think it is well worth the expense.

It has been estimated that Americans have been paying around $500 million each year for a quick loan to put their tax refund money back into their pockets almost immediately rather than wait. Unfortunately, lower income people tend to be the ones to go for these loans because they have the greatest need to have the tax refunded immediately. It appears that the tax refund loan program was created around 1975 and is said to highly target those who qualify for and receive the “earned income credit” because it tends to create fairly high refund amounts. This increases the amount of interest that is charged. Yes, it may seem silly for someone a relatively high price to have their money right now, but it happens on a regular basis. When someone needs the money quickly to pay rent or be evicted, or to handle other financial emergencies, they are very willing to pay what it costs and rightly so, for a tax refund loan.

What Is A Tax Refund Loan Cash Advance?

What do you do and where do you go when you need money to cover an unplanned expense if you are short of cash and your next pay day is still a week away? Perhaps a payday loan or cash advance is your solution? If it is around that time of the year when we file our taxes there may be another often overlooked option for you. There is an option that can really help people in times of emergencies when we are short of cash and it can help save you money as well. They are called tax refund loans or as many people are referring to them, Tax Refund Loan Cash Advances!

Most people become extremely worried whenever a big emergency like a major car repair or anything like that occurs and they are short on funds.

Tax Refund Loan Cash Advance

This happens because by and large our monthly incomes just are not sufficient to cover our already restrictive budget and set aside money for unexpected financial emergencies. So when many of us are faced with any kind of extra expense we can easily become panicked about how we will find a way to get the extra cash we need. Payday cash advances were developed and came into existence to address all such short term financial issues so people do not have to worry and they can remain current on important budgeted expenses such as rent, mortgage payments and utility bills.

Tax Refund Loans are basically very similar to Cash Advances. The primary difference is that the tax refund loan relies on your pending tax refund from the IRS to repay the loan whereas cash advances rely on your next paycheck for repayment. In a way both are forms of collateral used by lenders today as methods to lower their risk in lending us the money. With both tax refund loans and the cash advances, lenders rely to a substantial extent on a promise to repay using a future anticipated asset we expect to have coming our way. Another difference is that with tax refund loan you must actually pledge your anticipated tax refund to the lender. This entails contractually assigning it to the lender as collateral as opposed to pledging your next paycheck for a cash advance loan.

Income Tax Refund Loans

A true tax refund loan is only available to you when you have calculated your IRS tax return and determined that you have a refund due back to you from the IRS as a result of overpaid taxes. Many payday and cash advance lenders advertise and promote under the topic of tax refund loans but few if any actually provide or offer a true tax refund loan.

As I have become more knowledgeable about many types of personal loans I have grown to understand why cash advance companies promote loan offers with titles like tax refund loan cash advances. The big reason is fairly simple and straight forward; most people in need of money and looking for a quick short term personal loan solution are not usually in a position to easily and immediately qualify for a true “income tax refund loan” at the exact time they need the money.

This is not to say that most could not qualify, just that the timing and the refund loan requirements are not frequently in alignment with our time of need. Because most of us do not have the luxury of time to plan for a loan in advance and because of how time and tax returns relate to the specific requirements for tax refund loans, most of us will have no choice but to opt for the cash advance. One such requirement for a tax refund loan is that you must actually efile your return as a form of documentation showing you have a pending refund coming back to you and for how much. Before you can be approved for tax refund loans the lender needs to know the exact refund amount so they can determine the loan amount you will qualify for.

TaxRefundLoans2.com is one of the experts that you can easily find on the internet today to assist you with tax refund loans. Using your computer you can easily locate them online to see what deals and offers they have to show you regarding Tax Refund Loans. It depends on your tax return situation, your monthly pay amount, credit history is not an issue, and/or the amount of your pending tax refund as to how much money you get authorized to borrow and what your interest rates will be.

It is important that you end up on the website TaxRefundLoans2.com. It is one of the best sites who has consistent lenders with the best loan offers and has a fine reputation. Avoid complications and go with the best. Get Tax Refund Loan Cash Advances from a lender who offers elastic payback terms and has been in business for quite some time. At TaxRefundLoans2.com you have options! Tax Return Loan Advance should only be taken when the emergency is significant because if your anticipated refund is less than you expected for one reason or another you will have to quickly find the money to repay the difference or even the full amount. Finding a reliable tax refund lender is not all that difficult, just go to TaxRefundLoans2.com.

Tips On Finding A Good Tax Refund Loan Cash Advance Lender:

Check online for testimonials.
Read articles related to tax refund loan cash advances for help.
Look on forums for referrals to lenders.
Go to www.TaxRefundLoans2.com.

Nearly all of us occasionally fall into unexpected situations where additional funds are needed to jump the money hurdle. In most situations like this there is little if any warning before financial tragedy strikes. When it does you may become conflicted about what course of action to take. Which will best help you deal with the financial emergency that stands before you. Today, the times and economy are both ruff and it is becoming ever more difficult to make a comfortable living. Today, the single amount of most middle class person’s income is just not enough to last for the entire month and to be able to set aside money for emergencies. It is becoming almost impossible for the average person or family to save anything out of their income. Our monthly budgets are really tight and getting tighter everyday because of inflation, lower wages, less overtime, fewer hours, and even if we have some savings; a single emergency can drain that too.

Tax Refund Cash Advance Loans are for getting past urgent financial needs such as a car repair so you can get back and forth to work, a debt, a loan repayment, and whatever expense becomes urgent when you are short of cash. There was a time when before the advent of personal loans that left us behind with terrible outcomes facing horrific conditions. Thanks to cash advances and tax refund loans most people have access to financial solutions deal with financial emergencies when opting for bank loans and waiting for for weeks is not an option. Tax refund loans can help you deal with financial problems by providing us with immediate cash to take care of financial emergencies and stop them from cascading downhill to make our situation even worse.

Millions of people today are being helped by Tax Refund Cash Advance Loans and TaxRefundLoans2.com is one of the lenders that you can easily find online.

Tax Refund Loans Versus Rapid Refund

Those who have accountants file their tax returns and also have a tax refund due them are usually given their money in two different ways: The “tax refund loan” and rapid refund. The question here is which of the two of these is better? Which one should you do and which would should you not do? Is there more to making a choice? You might be surprised at the answer.

Tax Refund Loans

The way a tax refund loan actually works is a tax preparer or a lender will actually assume the risk of receiving the money and loan the taxpayer the money out of their own funds. When and if the IRS refunds the full anticipated amount of money the taxpayer appears to have overpaid, the tax preparer or lender will reimburse themselves with the money the IRS refunds on the tax return. Tax refund loans provide a valuable and highly appreciated service to many tax payers who are in urgent need of money. Some just days away from being evicted from their homes or need to repair their car so they can continue to get back and forth to work. It is my opinion that Tax refund anticipation loans have actually been inappropriately labeled by some as predatory lending by a few who are ignorant and unfamiliar with the risk and costs involved with making these types of tax refund loans.

When the tax preparer completes or the lender has proof that your return has been transmitted to the IRS, they are anticipating that you will really receive that particular amount of money. Approximately 10% of individuals choose this so that the money can be in their pockets immediately. However, there is a hefty price associated with taking this loan. Although it will only be about 10 days before the tax preparer receives the money, they are charging high fees and that can cost big bucks as a percentage to the taxpayer for this short-term loan.

It is estimated that Americans are paying millions each year for tax refund loans in order to have their money in their pockets immediately. Unfortunately, lower income people tend to be the ones at risk because they have a greater need to have the money immediately. This is a program that was formed in 1975 and is said to target those who receive the earned income credit because of the increased amount of the refund. This increases the amount of interest that is charged.

Yes, it may seem silly for someone to pay to have their money right now, but it happens a lot. Honestly, isn’t that what we do when we purchase goods and services through any type of loan? We pay a premium to “Have It Now”. Most tax payers who actually take tax refund loans are very grateful they are available because they need the money urgently. They are very thankful they exist and are very willing to fork over a portion of their cash to cover the fees associated with tax refund loans. I think the real question is is their need for the money really so urgent or is it a case of, “I Can’t Wait To Go On A Spending Spree”?

Rapid Refunds

I for one have seen considerable contradictory information about a rapid refund. One type of rapid refund is a completely different story and does not constitute a loan. The other definition of a rapid refund is very similar to tax refund loans, whether it be simply a loan, or fancied up with a debit card. One does not put the money into a person’s hand immediately, but due to e-filing of the tax return and the faster speed by which the IRS may make your refund available, a person can have their money within about two weeks or sometimes less for a “Rapid Refund”.

Rapid Refund is frequently done through some accounting offices in the form of debit cards. A debit card is provided and should be funded on a certain date. Once that card is funded, it is used just like any other debit or credit card. A person is also given a pin number so that they can withdraw cash from an ATM machine. Based on my research, debit cards are more typically associated with the type of rapid refund that resembles tax refund loans.

Refund money may also be deposited directly into a person’s bank account by the IRS. I find this a bit on the scary side since they can just “Take It Away” also. The debit card option is often given to those who do not have checking accounts. And for others, they prefer not to freely give their checking account information to the IRS (that would be me). Nevertheless, some tax preparers do not offer the debit card program, so it may be important for you to ask if a debit card is something that you may want.

Obviously, one form of rapid refund is the best financial management winner, although you won’t have the money in hand the very day you file your tax return. However, you will save money and you will still have your refund rather quickly. On the other hand, if you really are facing a financial emergency or just don’t want to wait you should opt for Tax Refund Loans.

Tax Refund Loans: Are They A Good Idea?

When people have completed their tax return and realize that they will be getting a tax refund, many seek something called a tax refund anticipation loan or just RAL (refund anticipation loan) for short. In this article, we will take a look at what this is and whether it is a good idea to take advantage of these loans.

Each year, thousands and thousands of people like my son Robert has his tax returns prepared by H&R Block.  Like many other tax payers he typically has a surplus of money withheld from his paychecks during the year. Robert is always told that he is has a tax refund due him by the tax preparers.  Then, like the past years, they offer him something like a Tax Refund Loan.

What Are Tax Refund Loans?

A tax refund loan, tax refund cash advance, rapid refund loan, and is also called a tax refund anticipation loan, is a way for you to receive your tax refund a lot sooner, as fast as the same day and almost always the next business day. This sounds like a pretty good idea, doesn’t it?  “Getting Your Refund Money In Hand Fast” always seems better than money we will see later at an unknown unspecified time. Or is it?

Well, as with most everything in our lives, nothing of much value is free.  What would be the incentive for someone to simply pay you the amount of your tax refund money that you have coming and get nothing in return?  There is no incentive and that is why tax preparation companies and payday loan companies, who also provide these types of loans, are willing to provide you this service for a fee; a fairly substantial fee!

Let’s take a look at what is really happening when you get a tax refund loan:  What you are actually doing is borrowing your own money, but that is the nature of a loan, you pay it back with your own money!  Do you really want to pay to borrow your own money? In reality, that is what we do with all loans. So what is the real difference?

So, the real questions are, how much are you willing to pay to borrow money and how urgent do you need it?  The cost of the loan and the relatively short period of time you keep it before repaying are the main differences from any other loan. Tax Refund Loans are more or less the equivalent of short-term payday or cash advance loans. Let us say that you are due to receive a refund of $ 600 dollars as a refund from the government because you overpaid your tax liability.  Your tax preparer, who did your taxes, then offers to pay that money right there and then, minus what he will tell you is a “competitive” loan fee. Well, actually it probably is for this type of loan.

This “competitive” loan fee varies from company to company. Some companies may also charge administrative fees and may even charge transfer fees. If you are due $600, and you pay $120 to get it sooner, you are essentially paying 20% on your money in one day.

Thus, unless you have an absolute emergency or just can’t wait to spend the money, you may not want to elect to go with a tax refund loan.

And, to avoid this entire situation next year, you can change your withholdings so that the government does not keep so much of your money and you will have it accessible throughout the year and have no need for Tax Refund Loans.

Car Title Loans vs. Anticipated Tax Refund Loans

What Are Anticipated Tax Refund Loans?

Annually many Americans find themselves needing their income tax refund now causing them to obtain an anticipated tax refund loan as a quick and simple method to get their tax refund quicker.  Anticipated tax refund loans are essentially a short term payday loan made against their anticipated income tax refund. The consumer typically applies for an anticipated tax refund loan through a company that prepares tax returns. Tax Refund Loans amounts are determined by the expected amount of their tax refund.

One of the many dangers with obtaining a tax refund loan is that the lender may intentionally increase the expected income tax refund amount in order to increase the amount of fees they charge.  This creates problems for the consumer when 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 and other risks are reasons the government is considering legislation to more closely regulate anticipated tax refund loans because they are susceptible to fraudulent activities.

A Car Title Loan Is An Excellent Alternative

Tax Refund Loans may sound like a quick and easy way to obtain your income tax refund sooner, obtaining a car title loan from a title lender provides you greater benefits. Most title lenders will discloses all of their rates and fees up front.  There is no leaving it up to a third party to calculate what your income tax refund will be.  Thereby reducing the opportunity for higher and unnecessary fees being charged to you, putting more money in your pocket, and the chance of a false income tax return being filed, increasing your risk of being audited by the IRS.

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 off your loan sooner. Whereas in tax refund loans the fees are automatically taken from your income tax refund before you receive your refund.  And fees are never waived with tax refund loans.

If you establish a relationship with a loan company you can build a financial partnership that will allow you to obtain future loans after you have paid off your loan instead of only during tax season each year.  Obtaining a car title loan from a trusted loan company helps restore or improve your credit and provides you with the comfort of knowing you have a partner with your financial needs.  It is clear to see, if you have a paid off and qualifying automobile, how a good title loan provides you more options and benefits than Tax Refund Loans.

Resources:

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Pros And Cons Of Tax Refund Loans

There is always a dramatic rise in the popularity of Tax Refund Loans at tax time.  These loans can be a good or bad idea depending on your situation and why you feel you might need one.  Let’s take a look at the pros and cons of getting such a loan.

PROS Of Tax Refund Loans

If you are having a cash flow problem and need money immediately, a refund anticipation loan could fill that gap for you.  An option you may want to consider would be payday loans online (up to $1500) to fit the same need, but perhaps you need a larger some of money fast and such a tax refund loan could do that for you.

Tax refund anticipation loans are processed much more quickly than a conventional loan.  A tax loan based on your anticipated refund can be processed, approved and funded in about 24 (sometimes less) to 48 hours, or the next business banking day. The funds are often dispersed the same or next day in comparison to conventional loans, which can take weeks from application to disbursement.

If you get a loan against your refund, the tax professional providing the loan generally takes their fees from the amount of your anticipated refund.  Therefore, you avoid upfront payments for the preparation of your income tax return because the fees are usually packaged into Tax Refund Loans.

CONS Of Tax Refund Loans

The interest and fees attached to such a loan are generally very high.  This is partially due to the fact that a third party lender is usually involved.  Tax preparers act more or less as tax loan brokers. Although people who prepare your taxes offer these tax refund loans, the loans themselves usually come from a bank or lender outside of the tax professional’s operation.

You are ultimately responsible for the full total of the loan.  If, for some reason, the lender does not receive the full amount of the loan from the IRS refund, you must pay the difference out of pocket. This is also one of the risks for the lender when making tax refund loans.

Many people take advantage of tax refund loans simply because they are available, and they are a means to get cash right away.  If you are not in urgent need of this money for some pressing obligation, it is always better to just wait for your Internal Revenue Service tax refund.

As mentioned before, such loans generally are associated with steep fees.  There are usually fees added in addition to the fairly high rate of interest charged on a tax refund loan.  Since these loans are usually short lived the fees are generally the main contributor to the cost of such loans. The combination of these two factors makes this sort of loan ill advised unless you are experiencing pressing financial difficulties that require immediate financial relief.  If you can hold off these obligations until you receive your IRS tax refund, it would be better all around for you to just wait and hold off on any kind of Tax Refund Loans.

The Advantages And Disadvantages Of Tax Refund Loans

Advantages Of Tax Refund Loans:

1. Instant Cash

If you are low on cash and cannot wait for your refund to pay off some bills, a loan in anticipation of your expected tax refund could certainly fill that role. While cash advances and payday loans online could pay for small bills that are due very soon, if you have a larger sum to pay off and no other way to do so, Tax Refund Loans could be very helpful. 

2. Short Processing

As opposed to other large loans, Tax Refund Loans have a short application and approval process. Normally processing will take no more than a day, and the loan can be distributed within 24-48 hours. In comparison, traditional loans can take weeks to be approved and distributed. 

3. No Tax Prep Fees

Usually if you decide to get a tax refund loan the tax preparer will deduct the cost of their services from your refund. This can be a great option for those who might not otherwise be able to afford the fees associated with professional tax preparation.

Disadvantages of Tax Refund Loans:

1. Interest and Fees

Unfortunately, the interest ad fees associated with these types of loans can be quite high. This is mostly due to the fact that the loan itself does not come from the preparers handling your taxes. Although you typically apply for and receive the loan through at a tax preparer’s office, they almost always outsource to third party lending banks.

2. Payment Responsibility

Like with any loan, you are ultimately responsible for repaying the bank for the money they lent you. Therefore, if for any reason the lending bank does not receive the amount the full amount of your refund from the IRS then you will be held responsible for the difference.

3. Lack of Loan Education

Unfortunately, hundreds of people take advantage of tax refund loans every year without fully understanding their options. As with any major financial transaction you always want to carefully consider the pros and cons before making a decision, and when it comes to tax refund loans if you do not need the funds right away then you would probably be better off waiting for a check from the IRS.

Tax Refund Loans

Tax Refund Loans – Consumer Advisory

In the past tax season around 10% of Americans will let someone borrow them their own money through tax refund loans. A rapid refund is just your income tax refund given to you on the spot by your tax preparation service- usually within 1-2 days. Rather than waiting for your tax return to come through the mail or via direct deposit directly from the government some people are choosing to get money in their pockets immediately at a great expense to themselves. Despite the length of the loan lasting only about 10 to 14 days they are costing individuals hundreds of dollars in some cases.

Tax Refund Loans: Are They Predatory?

Overall this lending practice is estimated to cost Americans as a whole about 500 million dollars a year. That number is dwarfed when compared to other lending and fee based finance charges imposed by banks. Look no farther than excessively high interest consumer credit cards with staggering late fees and over limit charges. What about the banking institutions with their sky high account overdrawn fees, per item check overdraft charges, and additional daily fees for each check that remains unfunded. Often the daily penalty fee is more than the value of the check, thanks to the unfair practice of clearing the largest checks first even though they came in last. That is more than 100% Per Day. The underhanded scheme causes a larger number of smaller checks to bounce. This predatory practice dramatically increases penalties and fees on many of those who can least afford it.

Unfortunately poor people tend to be affected the most by tax refund loans because they have a greater need to get their money as fast as they can. Those targeted most tend to be recipients of EITC, the Earned Income Tax Credit. They recently accounted for about 55% of tax refund loans. The program, formed in 1975 to help low wage workers is being undermined by tax preparation services that are eating away at these refunds. Refunds that are being awarded based on the EITC cornerstone that the qualifiers for EITC get most of the federal taxes refunded in an attempt to relieve poverty for hard working people.

It seems silly to many of us that someone would pay so much of their tax refund to get the money in 1-2 days instead of only 10 to 14 days when filing electronically, directly with the IRS. But many of us don’t understand the desperation so many people feel when they are trying to make ends meet on a low income. What if, and some taxpayers do, need their tax refund loans right now to stop the out of control charges being levied by their bank because they made the mistake of over-drafting their checking account. These fees accumulate rapidly and are nearly impossible to stop when you are short of cash.

Education And Tax Refund Loans

People need to be educated that they don’t have to give up their money in the first place through Tax Refund Loans. Employers will let workers change their W 4 forms to adjust their withholding to more closely match their tax responsibility. That way, people aren’t paying out their wages in taxes throughout the year unnecessarily in the first place. People also need to be educated that electronic filing is free for many people now and with direct deposit it only takes about 10 days to get a refund.

Breaking The Cycle Of Tax Refund Loans

If your financial life is difficult its important to weigh the benefits and drawbacks of getting money fast vs. getting more money by waiting only 8-9 more days. Free filing is available to those who qualify using the criteria that can be found at www.irs.gov. Assistance from the Volunteer Income Tax Assistance program is available for people with incomes less than ,000. VITA can be reached at 800-829-1040 with sites around the country. Keep what is yours – don’t let the tax companies keep part of your hard-earned income. Explore your options and be patient- it might save you a couple hundred dollars or more on tax refund loans.