![]() For example, getting your loan on a prepaid debit card could carry a fee of $30 while getting it on a check might have a $20 fee. There will be another fee that depends on how you receive your loan. If they are helping you file your taxes, you will need to pay the cost of filing (probably about $40). Lenders typically charge an application fee that can be as high as $100. Note that if you get a loan from a well-known tax filing service, you will likely pay less than if you go through a third-party lender. In some instances, they look eerily similar to payday loans – small, short-term loans with high interest rates. The biggest reason to avoid tax refund loans is that they are expensive. It also may not be a good idea if you suspect for some reason that you won't be able to pay back the loan in full (such as if the lender offers a loan worth slightly more than your refund, and you don't know if you'll be able to pay back the difference). ![]() If you are looking for a loan that lasts more than a couple of weeks, a tax refund loan is not the best choice for you. So if you claim those credits, and are filing early, you may have to wait longer than usual. For 2022, when you file your 2021 taxes, the IRS says that the earliest date you could expect get an EITC/ACTC refund will be the first week of March. Under federal law, the IRS cannot provide tax refunds right away for people who claim these credits. The people who most commonly receive tax refund loans are taxpayers who file early in the tax season and claim the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC). While the IRS issues refunds typically within 21 days after getting your return (and can take over six weeks for paper returns), some lenders could get you the money faster, depending on your refund option. Or perhaps your emergency fund isn't quite big enough and you could really use the money from your tax refund. Maybe it's February and you have a major bill coming up. The most obvious reason to consider a tax refund loan is because you need money quickly and for the short-term. And if you want to pre-qualify as a candidate, you may need to provide your Social Security number, contact information, and the refund amount that you got for the previous tax year. You should keep in mind that some lenders may also review your credit history. Tax loan lenders will verify your identification, weigh your tax history with the IRS, and consider how much debt you owe. Your qualification depends largely on the amount of money that you will be refunded by the government. How to Qualify for a Tax Refund Loanīecause tax loans do not have as much risk as unsecured loans, credit score requirements are usually not as restrictive. The only other thing to keep in mind is that if your refund is smaller than your tax refund loan, you will still need to pay the loan back in full. At this point, your loan is repaid and you made it through tax season. Once the IRS processes your refund, it will go directly to the lender. Some lenders only offer one of those methods while others may offer multiple options. You may receive the loan on a prepaid card, on a check or as an electronic deposit in your bank account. The loan that you receive from a lender will have the value of your anticipated refund minus any fees or interest charges. Tax refund loans typically only last a couple of weeks – just long enough for the IRS to process your tax refund. Many tax filing services will also offer you a tax refund loan after you file with their service. This may require a little research on your part to make sure the lender is reputable. Lenders are often small financial institutions. It is a loan that a lender makes based on the amount of your federal income tax refund. Iowans who paid their federal taxes using Turbo Tax for tax years 2016, 2017, and 2018 and were eligible for the IRS Free File program will receive compensation checks in the mail.A tax refund loan is officially known as a refund anticipation loan (RAL). So how do you know if you're eligible for some of the settlement money? The Register reports that you should have already been contacted through the mail by Rust Consulting, the settlement fund administrator. The Register reports that the Iowa payout is just part of a $141 million settlement to be sent to millions of Americans. Approximately $1 million will be paid out to Iowa residents who paid but shouldn't have. The Register reports that more than 35,000 Iowans paid money to submit their federal tax return, which should have been a free service. Thanks to the bipartisan coalition of all 51 (attorneys general), hard-working Iowans are being repaid the money they are owed. Tax season is already stressful enough for many Iowans. No Iowan struggling to make ends meet should have to fear being taken advantage of by deceptive business practices when filing their taxes.
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