There are many people who want to take advantage of their income tax money quickly and do not wish to wait around for it to be deposited into their bank accounts or to have a check sent to them through the mail. Because many people get a good size income tax refund they are very impatient. This is where an income tax refund loan may come into play.
An income tax refund loan is a loan given on the amount of money you are being returned from the Internal Revenue Service. The firm that completes your tax returns makes this loan. This loan is not coming from the Internal Revenue Service directly.
Who Can Obtain A Loan Of This Type
As long as you are scheduled to get a refund from the Internal Revenue Service you can be approved for this loan. This loan offer is made to people no matter what the amount of income the person has. The only income requirement is that you be expecting a tax refund. Loans for people with bad credit are hard to come by but by not having a credit check completed for this type of a loan makes it very simple to come by. The only requirement is that you must be receiving a tax refund.
Exceptions To This Qualification
Even though you might be all of the requirements to receive an income tax refund loan there are exceptions that might disqualify you from receiving this loan. The first of these exceptions is if you owe any back taxes to the government. This amount will be subtracted from the tax refund you are entitled therefore making the amount smaller. Also if you have a lien against any of your wages by the court system you will not be able to receive your tax refunds until that debt is paid off and your refunds are not sent to the creditor.
As with anything that sounds too good to be true there are disadvantages with an income tax refund loan. The biggest disadvantage is that these loans are a very short-term length and the interest rates that are applied are very high. Many have reported that the interest rates can be as high or higher than two hundred percent. The good part with this is that because the loan is for such a short time period the interest charges that accrue are very minimal. Another disadvantage is that if for some reason the Internal Revenue Services rejects your tax return you will still owe the money back. This will make it very hard for some people to pay back their loans in the short time period required.
Income tax loans are a great idea if the plan is to use them wisely. If you were planning on taking the loan just because you want your money sooner you would probably be better off waiting. This is because you will not have to pay interest on the money that is already yours. If you have any questions it would be a good idea to consult with an accountant or other another tax preparer.