It’s about that time of the year again: Tax season 2010. Everyone is running to file their taxes in hopes to obtain fast cash in no time, taking out tax refund loans to cut the waiting time down to a minimum. It’s obvious many of us are in need of money fast, but is a tax refund loan the best option to choose? How effective are they? Are there other options?
The truth about Tax Refund Loans
The truth is, tax refund loans or refund anticipation loans (RAL) are very expensive. Just like payday loans and cash advances, tax refund loans must be handled with absolute care. In fact, several politicians have tried to cut down on RALs over the past years, citing interest rates on these types of loans exceeding 500% in many cases. What then can a person in need of immediate financing do to obtain money fast?
Consider Payday Loans
If you really need money now, consider payday loans or installment loans. The difference between a tax refund loan and a payday loan is that one is easier to work with than the other. Payday loans are not only cheaper, but they are much more flexible to work with. You pay a flat one-time fee of $15, $20 or $30 (depending on the lender and/or loan amount) and you will have the money to relieve some of your immediate cash needs in no time. You get just the right amount of money to hold you over – no stress, no pressure, no additional money loss.
On the other hand, if you choose to obtain a refund anticipation loan, your “anticipation” could certainly backfire on your finances. You lose more money in the end –- money that could actually be going towards your savings fund and other important living expenses.
Save, save, save!
Saving money has become the top concern in the minds of many consumers these days. Through the ups and downs of the economy, more people are finding out that there is nothing more shielding than to be financially prepared. Having a sufficient amount of savings will benefit you more than any type of loan made available for your convenience. So, if you feel the need of a tax refund loan, consider other options first before making a final decision. Your wallet will be thankful for it.