{"id":18108,"date":"2011-02-14T00:00:00","date_gmt":"2011-02-14T00:00:00","guid":{"rendered":"https:\/\/getirshelp.com\/blog\/refund-anticipated-loans-good-bad\/"},"modified":"2026-07-24T22:02:18","modified_gmt":"2026-07-24T22:02:18","slug":"refund-anticipated-loans-good-bad","status":"publish","type":"post","link":"https:\/\/getirshelp.com\/blog\/refund-anticipated-loans-good-bad\/","title":{"rendered":"Are Refund Anticipated Loans Good or Bad?"},"content":{"rendered":"

If you've got an IRS letter on your desk right now, you have a decision to make, and the clock matters. I'm Darrin Mish. I've spent 32 years helping people with exactly this kind of situation. Here's what you should do.<\/p>\n

There has always been a debate surrounding Refund Anticipated Loans or RALs. \u00a0Refund Anticipated Loans are usually taken up by the lower income bracket taxpayers who need or want their tax refunds quickly. \u00a0Tax preparers, taking advantage of this demand, would arrange for RALs to give immediate cash advances to those who cannot wait for their refunds. \u00a0Naturally, the amount of the loans is limited by the amount of refunds the taxpayers are getting. \u00a0And the taxpayer on the other hand, would hand over rights to their refunds to the tax preparers. \u00a0Needless to say, the loans come at high interest rates and fees despite the low risk to the lenders. \u00a0Click here to read or watch more IRS Help resources.<\/a><\/div>\n
Essentially, with Refund Anticipated Loans, you are paying interest to borrow money that is already yours, albeit just for a short term, usually for two to four weeks. \u00a0Nevertheless, many tax preparers promote the RALs with a lot of hype and make it seem like such a good deal.<\/div>\n
At times, these RALs are also known as \u2018payday loans\u2019 as they tide you over until payday. \u00a0Certain states, such as Oklahoma have legislation that governs how much interest can be charged for RALs, the amount of loan that can be disbursed and the length of term of the loans. \u00a0This acts as a safeguard for the borrowers.<\/div>\n
Besides the exorbitant interest rates and high fees, there is another inherent danger in RALs. \u00a0If your amount of tax refund is less than the amount of loan you have taken, you are liable to repay the balance and will be charged hefty fees and fines if you are not able to repay the RALs on time.<\/div>\n
Did you know that the Federal Deposit Insurance Corporation (FDIC) regards RALs \u2018unsafe and unsound\u2019? \u00a0The FDIC has come up with this stand ever since the IRS has stopped giving information on whether a taxpayer owes outstanding debt for student loans or child support. \u00a0Since last August, the IRS has ceased giving out this debt indicator information.<\/div>\n
Another regulatory body that has cautioned against RALs is the Office of Comptroller of Currency that has issued a directive against HSBC, the bank that issues RALs for H&R Block. \u00a0The directive prohibits HSBC from giving out anymore RALs.<\/div>\n
In April last year, JPMorgan Chase exited the RAL market leaving only Republic Bancorp and two other banks as RAL lending banks. \u00a0Republic Bancorp works alongside Jackson Hewitt and Liberty Tax Service, the nation\u2019s second and third largest tax preparers.<\/div>\n","protected":false},"excerpt":{"rendered":"

If you've got an IRS letter on your desk right now, you have a decision to make, and the clock matters. I'm Darrin Mish. I've spent 32 years helping people with exactly this kind of situation. Here's what you should do. There has always been a debate surrounding Refund Anticipated Loans or RALs. \u00a0Refund Anticipated […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"rop_custom_images_group":[],"rop_custom_messages_group":[],"rop_publish_now":"initial","rop_publish_now_accounts":[],"rop_publish_now_history":[],"rop_publish_now_status":"pending","footnotes":""},"categories":[4],"tags":[],"class_list":["post-18108","post","type-post","status-publish","format-standard","hentry","category-irs-help"],"_links":{"self":[{"href":"https:\/\/getirshelp.com\/blog\/wp-json\/wp\/v2\/posts\/18108","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/getirshelp.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/getirshelp.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/getirshelp.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/getirshelp.com\/blog\/wp-json\/wp\/v2\/comments?post=18108"}],"version-history":[{"count":1,"href":"https:\/\/getirshelp.com\/blog\/wp-json\/wp\/v2\/posts\/18108\/revisions"}],"predecessor-version":[{"id":21917,"href":"https:\/\/getirshelp.com\/blog\/wp-json\/wp\/v2\/posts\/18108\/revisions\/21917"}],"wp:attachment":[{"href":"https:\/\/getirshelp.com\/blog\/wp-json\/wp\/v2\/media?parent=18108"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/getirshelp.com\/blog\/wp-json\/wp\/v2\/categories?post=18108"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/getirshelp.com\/blog\/wp-json\/wp\/v2\/tags?post=18108"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}