Beware of Tax Refund Loans

Tax refund anticipation loans

Some tax return preparers offer to provide an “instant” tax refund by arranging for loans based on the expected refund.  The loan is for a very short period of time between when the return is filed and when you would expect to get your refund.  Like other short-term loans, the fees may seem small but amount to an annual interest rate of 200 percent or more.  It is best to patient and wait for the refund.

Source: Using Credit Wisely After Bankruptcy Pamphlet, National Consumer Law Center, Boston, MA, www.nclc.org.