• Tax refund loans, often referred to as Refund Anticipation Loans (RALs), are offered by some professional tax preparers as a way for taxpayers to receive their refunds almost immediately, rather than having to wait weeks to receive their refund from the government. However, these loans have been criticized by many industry professionals since the fees and interest charged are relatively high. Although this guide provides an introduction to RALs and briefly discusses the arguments against them, it is always best to seek out a professional for advice on taxes and other financial matters.

• When filing your tax return through a business, they may offer you the option of a "fast cash" or "instant" refund. Despite these alternate names, what you are actually being offered is a Refund Anticipation Loan, meaning that the business through which you file your taxes is advancing you your refund money before it is actually paid out. Rather than waiting weeks for the government to mail you your tax refund check or deposit the money in your account, an RAL allows you to receive your tax refund right away. When you sign up to receive an RAL, the tax preparer electronically files your tax return for you and then advances you the money he has estimated you'll receive as a return. Once your tax return is completed, the IRS then deposits the funds into the loan issuer's account.Wisconsin Department of Revenue: Refund Anticipation Loan (RALs) Forbes.com: Beware Of Tax Refund Loans (February 13, 2006)

1. Although receiving your tax return almost immediately via an RAL rather than having to wait a few weeks is tempting, many industry professionals advise against RALs for the following reasons:
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3. The interest charged on RALs can run as high as 264%, much higher than the interest charged on other loansBankrate.com: Cheap, fast refund loan alternatives
4. If you don't have a bank account, you will likely be paying another three to seven percent of your refund to cash your refund checkMSNBC: E-filing can make high-fee loans unnecessary (February 15, 2006)
5. The business from which you receive your RAL will usually charge you at least $100 in feesNew York Life: Are Tax-Refund Loans A Good Deal?
6. If you receive your tax refund in the form of a prepaid debit card, you will incur additional ATM and other fees when you use the cardMSNBC: E-filing can make high-fee loans unnecessary (February 15, 2006)
7. You are essentially paying these fees and interest rates to borrow your own money
8. If your tax return is delayed or denied by the IRS for any reason, you are responsible for paying back the RAL to the issuing party at high interest ratesForbes.com: Beware Of Tax Refund Loans (February 13, 2006)
9. If you have already spent your tax refund money and cannot pay it back in a timely manner, the lender may turn it over to a collection agency, thus damaging your credit ratingForbes.com: Beware Of Tax Refund Loans (February 13, 2006)
10. As discussed below in the Alternatives section, by filing your taxes electronically and signing up for direct deposit you can receive your tax return from the IRS in as little as ten days

If you do choose to enter into an RAL agreement, be sure to read it in detail and ensure that you understand all its fees and provisions before signing it.Wisconsin Department of Revenue: Refund Anticipation Loan (RALs) If you have further questions about tax refunds and loans, seek out professional advice from a tax agent, the IRS or a professional financial adviser.