RALs, or refund anticipation loans, won't be as heavily advertised this tax season in an effort to avoid bad press. However, most major tax preparation chains will still be promoting these "instant" refunds behind the scenes.
Touted by tax preparers as the fastest way to get cash in the bank or on prepaid debit cards, refund anticipation loans have become quite popular in recent years despite their excessive costs. In reality, the only benefit these loans provide to consumers is that they may receive their money in a day or two, as opposed to the maximum of ten days it will take for the IRS to complete direct deposits.
If you're tempted to use an RAL this year because cash is tight, try thinking of it this way before making a final decision. You've already provided Uncle Sam with an interest-free loan on whatever money the IRS owes you. Now, by utilizing a refund anticipation loan, you're essentially borrowing against your own money and paying substantial fees for what typically amounts to shortening your waiting period by just a few days. It doesn't make sense.
So, if there's any way to hold out for just a little longer and wait for a free direct deposit from the IRS, then do it. The money the IRS owes you is rightfully yours, and you deserve to get every penny of it back.
