Tax season can be a stressful time for many people. The thought of preparing your taxes and possibly owing the government money can be daunting. However, for those who are expecting a refund, the anticipation of receiving that extra cash can be exciting. But what if you need that money now? That’s where tax refund loans come in. They are also known as refund advances, are short-term loans offered by some tax preparation companies. These loans allow you to access a portion of your tax refund before the IRS sends it to you. The amount of the loan is based on the estimated amount of your tax refund.
What Are Tax Refund Advance Loans?
Tax refund advance loans, also known as refund anticipation loans (RALs), are short-term loans of $250 to $4,000 that allow taxpayers to borrow money against their expected tax refund. The loans are typically offered by tax preparation companies, banks, and other financial institutions. The loan amount is usually based on the taxpayer’s expected refund amount, and the loan is paid back when the refund is received.
How do tax refund loans work?
To apply for a tax refund loan, the taxpayer must first have their tax return prepared by a tax professional. Once the tax return has been prepared, the taxpayer can then apply for a tax refund loan. Once the loan is approved, the taxpayer usually receives the borrowed money within 24 hours.
When the taxpayer receives their tax refund, the refund is usually deposited directly into the bank account or prepaid debit card used for the loan. The loan amount, plus any fees and interest, is then deducted from the refund amount. If the taxpayer’s refund is less than the loan amount, the taxpayer is responsible for repaying the remaining balance of the loan.
Continue reading on the next page for the terms and conditions and the minimum amount you qualify for.