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.
Filed Under: Tax Refund Loans