The True Cost of Tax Refund Loans

RAL: a loan offered by a third party (usually a bank or third party tax preparation company) that is borrowed against a taxpayer's expected refund. Similar to payday loans, RAL's often translate into higher fees and APRS The True Cost of Tax Refund Loans NUMBER OF RALS & RACS IssuUED (IN MILLIONS) 12.7 12.9 $358.4 Billion Total 2010 Tax Refunds average refund $3,000 12.4 12.1 12.2 12 11.7 10.8 10.8 ORAL RAC TERMS TO KNOW 9.6 8.7 Principle The amount borrowed or the amount still owed on a loan, separate from interest. 8.4 LAST DAY TO FILE TAXES 6.9 RAL Fee An amount of money charged to process an application for a loan or other financial services. Refund 17 Anticipation Loan APRI %24 APR The annual rate that is charged for borrowing an amount of money. 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 RAL & RAC USe BY ADJUSTED GROSS INCOME (IN THOUSANDS, US $) How TO CALCULATE YOUR TAx LOAN APR (EXAMPLE) Percent of Total Returns AMOUNT OF LENGTH TOTAL FEES EXPECTED REFUND OF LOAN APR 0% 2% 4% 6% 8% 10% 12% 14% | 355% 2 $3,000X 65 days $292 10 days Refund 3.55. Ş0-10 Anticipation Check Move decimal point 2 spaces to the right REFUND PROCESSING TIMES RAC >$10-25 PAPER >$25-50 2 Weeks ELECTRONIC >$50-75 RAC: a temporary bank account into which the IRS deposits a refund check. High-cost account setup fees and check cashing fees usually apply. With RACS, Taxpayers usually get their money only a few days in advance of a typical direct deposit refund. RAL RAL RAC generations tedera oredit unien >$75 pearanalytics RAC 8320