TAX SEASON: TIME FOR ANOTHER KIND OF PAYDAY LOAN?

This time of year, Americans' thoughts turn to tax returns. Increasingly, however, more taxpayers are looking at their refunds as a new kind of payday advance.

Sometimes called "Refund Anticipation Loans," these loans amount to cash advances granted to people expecting money back from the government. Giant tax-preparation firms such as H&R Block have become major "lenders" of these advances, which have gained big-time popularity in recent years.

Before you go jumping in, however, consider the consequences. First there's the interest: customers may pay anywhere from fifty to five hundred percent on these loans. Then there are the fees: H&R Block, for example, charges over sixty dollars for a refund payday loan of three thousand dollars.

Above all, keep one thing in mind -- Refund Loan applicants are essentially signing over their refunds to their tax preparer. Bottom line: if you can afford to wait for your money, you might want to do just that.

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Comments

[payday advance]

I have greatly benefited from a payday advance various times when I've been in a bind and needed money for a few days. Thanks to these payday loan institutions, I was able to get money after banking hours for my daughter's birthday party, and also various times when my checking account was a little short and I needed to deposit money in my account to save checks from bouncing. The fees I paid to get the loan was a lot cheaper than the bank fees I would have acquired. I support payday loans and these type of businesses. If used as they are intended, in a wise manner, they are a great benefit when someone is in a bind.