![]() You could also consider a credit card as a last resort. Weiss recommends a personal loan if you need quick funding, which will often have more favorable terms and a lower interest rate than a tax refund advance. If an emergency expense pops up, like an essential medical bill, car repair or other necessity, there are better borrowing options available. Even a simple miscalculation could lead you to expect a higher refund and accidentally borrow more money than you can afford to pay back when your refund hits your account. Waiting until your refund comes through in 2023 is your best option. What are some good alternatives to tax refund advance loans? Personal finance experts recommend avoiding payday loans at all costs. ![]() In some states, payday loan rates can average as high as 391% to 521%. Note: Be careful of payday lenders that may advertise similar loans during this time of year, since these companies often have extraordinarily high interest rates and fees. You do not have to file your taxes with H&R Block to apply, but if you do, you can use your refund to pay down your line of credit. It's a line of credit up to $1,000 from now through January 7. H&R Block is offering Emerald AdvanceĀ®, which is a little different. You'll need to file your taxes with Jackson Hewitt for both loans. The no-fee refund advance loan offers up to $3,500 and has a 0% APR, but isn't available until January. The early refund option allows you to receive up to $1,000 in December and up to $3,500 in January, but has a finance charge and steep APR of 34.22%. Jackson Hewitt has two refund advance loans: an early refund option and no fee refund option. If this happens, you're responsible for repaying the loan in full (or the amount your refund doesn't cover) from your own pocket. ![]() Since these loans are based on an expected refund, there's always the possibility that you may not receive a refund when you file your taxes in 2023 - or your refund may be smaller than expected. There are a few reasons why you should be wary of tax refund advance loans. What are the risks to taking out a tax refund advance loan? Otherwise, you'll need to repay your loan by the agreed upon due date. If you're required to file your taxes with a tax preparation company, the amount owed may be automatically taken from your refund. ![]() You'll receive your funds within a few business days, though some services provide same-day or next-day access to your money. So, even if a service advertises $3,000 advances, it doesn't mean you'll qualify to receive this full amount. Tax refund advance loans typically don't have the same credit score requirements other loans do, and the amount you're approved for may depend on your expected refund amount. You may need to provide proof of income, your W-2 (if available) and other financial records. You'll apply for a tax refund advance on a tax preparation company's website. "Therefore, fees, requirements and APRs vary drastically from one company to the next." If you're considering a tax refund advance, Weiss recommends reading the fine print and comparing different options. "This isn't a standardized product," said Weiss. Some tax filing services don't charge interest for this service as long as you agree to file your taxes with them, but that may mean you end up paying a fee to file your taxes. For context, average credit card APRs are around 18%, while personal loan APRs are around 11.08%. ![]() Interest for this type of loan is typically higher than most other loans, with annual percentage rates spanning around 35%. ![]()
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