Thursday, February 5, 2009

Tax Refund Loans Too Expensive, Says Bram; Use Payday Loans

More anti-tax refund loan evidence; use payday loans

When you need a little bit of extra cash, there are few options as fast, convenient and discreet as payday loans. Yet during tax time, the eyes of some consumers may be captured by the tax refund loan ads of big-box tax preparation services like H & R Block and others. However, tax refund loans do consumers an expensive disservice. This is the focus of a recent article by personal finance author Thursday Bram. She writes for the finance blog Investopedia that tax refund loans are products that should be handled with extreme caution - if they must be handled at all.

Payday loans are cheaper and much more flexible. Why waste money? Pay a flat fee of $15 to $30 per $100 loaned and be done with it. They are not difficult to pay on time, and numerous studies show that as high as 90 percent of customers do pay off their cash advance on time.

Tax refund loan numbers not in your favor

Bram shows that according to National Consumer Law Center research, 12 million taxpayers took tax refund loans in 2004, which is a staggering figure. Imagine how much money they could have saved if they’d explored their options more fully. Sure, it seems easy. The tax preparer offers an advance payout that’s available immediately. How convenient; no need to wait for the IRS to get around to your return and either mail or wire the funds. Once fees for the service are factored in, however, the tax preparer takes a large part of the person’s tax refund. ... click here to read the rest of the article titled "Tax Refund Loans Too Expensive, Says Bram; Use Payday Loans"

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