Rapid Tax Refund Loans

Fresno, CA If someone offered to take part of your paycheck each pay period and hold it for you until the end of the year, then charge you a fee of up to 2,000-percent to get it back, you'd probably laugh at them. Yet if you've ever taken a tax refund loan, that's exactly what you've done.

Rapid tax refund loans can promise your tax dollars within 24 hours. But the key word is "loan." That means fees and interest, on your own money.

Greg McBride with BankRate.com said, "Refund anticipation loans come at a high cost for what amounts to getting your own money back sooner. After all, this money that you've lent to Uncle Sam for free over the past year."

The Consumer Federation of America estimates refund anticipation loans cost Americans about $800-million dollars last tax year. But there are ways to avoid a high-interest loan, and still get your money quickly.

"Combine things like e-file with direct deposit to really speed up the time frame," said McBride.

If you plan to use the money for a new home appliance, consider an in-store financing plan that offers free interest for a limited time.

"By the time the bill comes due you will have that tax refund in hand, you can pay that bill off in full and not incur any finance charges."

And to skip the wait next spring, revise the amount withheld from your paychecks now.

"You want to get that money throughout this year, a little bit more this paycheck, rather than having to wait on a big refund check next spring after you've filed your taxes."

You do that by filing a new form W-4 with your employer and claiming more withholding allowances.

So unless waiting ten days or so for your refund will make the difference between losing your home to foreclosure or something equally as drastic, try not to fall for these outrageous offers.