How Do You Beat Predatory Lending By Avoiding Refund Anticipation Loans?
According to the Americans for Fairness in Lending (AFL) organization, about 9 million refund application loans are processed costing taxpayers a minimum of a billion dollars a year. Tax preparers target hardship populations for refund anticipation loans and charge unreasonable interest rates. Understand the risk and avoid this predatory lending practice. Understand the risk. Refund Anticipation Loan is a short-term cash advance against a taxpayer’s anticipated income tax refund. It is also a form of predatory lending because of the high interest attached to the loan. The average annual percentage rate charged for refund anticipation loans is more than 500%. Large chain tax preparers are no different. According to AFL, some chains like HR Block and Jackson Hewitt have Annual Percentage Rates averaging from 83% to 148% of the tax payer’s anticipated income tax refund. Get all of your money. The average income tax return is direct deposited in a tax payers account within 10-12 days after
