Every year Oregon and Washington consumers are lulled into taking on Tax Refund Anticipation Loans (RAL). These loans, also known as advances on tax returns, are generated by banks, the usual suspects, and then processed through tax preparers. The idea is that the loan exists for a very short time, namely the time between the filing of your tax refund and the date that you would expect to receive your refund. In this era of direct deposits and electronic filing, this period is sometimes less than a week.
Once the return is prepared, the RAL is made against the expected return amount. A fee which is deducted from the loan proceeds can range between $30 to nearly $140. Because the loan lasts only a week or so, these fees translate into an anual interest rate between fifty to five hundred percent, or somewhere between “not an option” to “completely insane.”
If your finances are such that this kind of loan is a necessity, the problem probably isn’t your income level but the amount of debt that you are carry. Contact a qualified consumer bankruptcy attorney to determine whether you might have some better options. Call one today.