There has always been a debate surrounding Refund Anticipated Loans or RALs. Refund Anticipated Loans are usually taken up by the lower income bracket taxpayers who need or want their tax refunds quickly. Tax preparers, taking advantage of this demand, would arrange for RALs to give immediate cash advances to those who cannot wait for their refunds. Naturally, the amount of the loans is limited by the amount of refunds the taxpayers are getting. And the taxpayer on the other hand, would hand over rights to their refunds to the tax preparers. Needless to say, the loans come at high interest rates and fees despite the low risk to the lenders.

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. Nevertheless, many tax preparers promote the RALs with a lot of hype and make it seem like such a good deal.

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