ral is refund anticipation loan
2007-11-12 16:00:34 · 3 answers · asked by wblueyesinvt35 2 in Business & Finance ➔ Taxes ➔ United States
HSBC bank, who previously funded these loans, has backed out of doing them due to people not repaying these loans. H&R Block and Jackson Hewitt used the same bank for these loans. H&R Block opened their own bank last year so they are able to offer a similar product for their clients only. You must have had H&R Block prepare your tax return in 2005 or 2006. The line of credit is for $500 and there is a charge for it. And the interest rates are not above the federal maximum which is 36%. It starts around December 10th. Check your local office for details
2007-11-14 14:59:50 · answer #1 · answered by Fool in the Rain 6 · 0⤊ 0⤋
The "Holiday Tax Loans" offered by a few of the storefront tax prep mills are dead. The bank that actually did the loans has pulled out of the program due to massive fraud losses. They would estimate your refund based upon a recent pay stub and the bank would make a loan to you that was due in February. For that they'd charge APRs as high as 3,000% in some cases.
Most of them will offer the RALs this year once you actually file your return. You must have your W-2s in hand to file, you cannot file with a paycheck stub legally and any taxpayer who files a return based on a checkstub is breaking the law.
However, RALs are a TERRIBLE idea. Interest rates and fees are extremely high given the short duration of the actual loan. I've personally seen APRs as high as 2,300% and 1,500% is very common. The lowest I've seen was 900%. There are loan sharks who charge less vig than that.
If you e-file your return for direct deposit to your checking account you'll typically see your refund in less than 2 weeks. I've had mine in as little as 8 days for Federal and 5 for State. The RAL gets you your refund about 5 to 10 days early and is a TOTAL ripoff.
Unless you're facing eviction in a day or two or need formula for the baby, skip the RAL.
2007-11-13 06:16:37 · answer #2 · answered by Bostonian In MO 7 · 2⤊ 1⤋
To the best of my knowledge, all pre-season tax loan programs were discontinued. The bank that funded the loans (HSBC) has discontinued them.
Generally, they were a bad deal anyway.
2007-11-13 08:56:53 · answer #3 · answered by Wayne Z 7 · 0⤊ 1⤋