Fast Refund signs start popping up all over town with the onset of Tax Preparation Season. What is a Fast Refund? Some people think it is a way to receive their refund in a more rapid way than the normal time frame the IRS requires to process their return and issue a refund. These refunds are actually Refund Anticipation Loans (also known as RALS).
You may have heard that these loans are preying on the poor and ignorant. Many tax filers would take offense to this stereotyping. There can be a ton of reasons why they might opt for a RAL. The rent is due, and their landlord is charging $10 a day in late fees. They might even have an eviction pending. When a refund can take 35-40 days if mailed, that would amount to $350-400 in late rent penalties (besides being an additional month late on the rent). And a refund can take 7-21 days if e-filed with a direct deposit, that would amount to $70-210 in late rent penalties. When compared to RAL fees, which are under $100, it almost makes more sense to apply for this type of loan. This is just one of the many sensible reasons some of our clients opt for this method of refund payment.
Our policy is to try to persuade them not to use a RAL, but when a client does opt for a RAL loan, we let then know exactly what it will cost. We show them the expected refund amount, we break down the fees, and we then show how much their check will be written. We do not issue the RAL loans, we just provide them as an alternative to the direct deposit/paper check method most people are accustomed. All fees associated with the RAL go to the Bank contracted to issue the loan.
We also offer clients who opt for this method, the option to go next door to The Money Hut and cash their RAL checks free of charge (in fact even our clients who receive a paper check in the mail can bring it up to cash for free).
Fast Refund signs start popping up all over town with the onset of Tax Preparation Season. What is a Fast Refund? Some people think it is a way to receive their refund in a more rapid way than the normal time frame the IRS requires to process their return and issue a refund. These refunds are actually Refund Anticipation Loans (also known as RALS).
You may have heard that these loans are preying on the poor and ignorant. Many tax filers would take offense to this stereotyping. There can be a ton of reasons why they might opt for a RAL. The rent is due, and their landlord is charging $10 a day in late fees. They might even have an eviction pending. When a refund can take 35-40 days if mailed, that would amount to $350-400 in late rent penalties (besides being an additional month late on the rent). And a refund can take 7-21 days if e-filed with a direct deposit, that would amount to $70-210 in late rent penalties. When compared to RAL fees, which are under $100, it almost makes more sense to apply for this type of loan. This is just one of the many sensible reasons some of our clients opt for this method of refund payment.
Our policy is to try to persuade them not to use a RAL, but when a client does opt for a RAL loan, we let then know exactly what it will cost. We show them the expected refund amount, we break down the fees, and we then show how much their check will be written. We do not issue the RAL loans, we just provide them as an alternative to the direct deposit/paper check method most people are accustomed. All fees associated with the RAL go to the Bank contracted to issue the loan.
We also offer clients who opt for this method, the option to go next door to The Money Hut and cash their RAL checks free of charge (in fact even our clients who receive a paper check in the mail can bring it up to cash for free).
