During the tax period there dramatic increases in the popularity of tax refund anticipation loans. The tax refund anticipation loans provide ways for taxpayers to access to funds rather than wait until the Internal Revenue authority processes tax refunds. They are short term loans that are processed against an anticipation of a tax refund. Many people are able t take advantage of the refund anticipation loans as an easier and faster way of getting cash right away. The loans are a good blessing to many people regardless of their circumstances are they are able to offer a source of cash when they are in need while waiting for the tax refunds. But at the same time, the loans have their disadvantages as they can turn out t be very expensive. Therefore, according to your circumstances refund anticipation loans can be a blessing and also bad. The following are some of the pros and cons of tax refund anticipation loans
Tax refund anticipation loans can sometimes come in handy. When you are facing a cash flow challenge and in need of cash immediately, the tax refund anticipation loan can bridge the gap. Depending on your cash flow needs, sometimes you can get cash check that can be able to meet your cash flow needs or even be able to cover a significant part of the problem
Refund anticipation loans at the same time are processed quicker than any other conversational loan. Normally after applying for a tax refund anticipation loan, it takes a minimum of 24 hours for the loan to be approved and then the funds will be seen to your bank account within 48 hours of approval. Hence, in comparison with conventional loans which take weeks to be approved, the loan can take a short period.
Refund anticipation loans do not have upfront costs and other income tax return costs. Only processing fees that are deducted from the loan hence the loan is cheaper.
The refund anticipation loan attached fees are generally very high. In provision of the loan, a third party is always involved hence increasing the interest costs of the loan. Even if the loans are provided by the tax preparers, the loans actually come from commercial lending organizations that provide it in normal interest rates. It is therefore not advisable to take the loan when you don’t need it as it will turn out to be very costly.
You will finally be responsible for the total value of the loan. In case the lending institution does not receive the anticipated tax refund from the internal Revenue Service, the principal and interest of the loan will be transferred to you.
The tax refund anticipation loan has been able to help many people to gain access to a quick and less-costly cash that can help in meeting personal and business cash flow challenges. But at the same time its interest rates are high. For more information on tax refund anticipation loans visit taxreturn247.com.au