Updated on November 11, 2016
Tax refund loans, also known as refund anticipation loans, have become immensely popular over the past few years. Before tax time, it is inevitable that taxpayers have emergency needs that they can’t wait for their refunds to be released by the IRS. That is why they look for lending companies that offer such loans.
Tax refund loan defined
As the name suggests, a tax refund or refund anticipation loan refers to a type of credit wherein a borrower get money in advance and will be paid using his or her tax refund. This type of a loan can be taken out from a bank or lending institutions. The main goal is to resolve a financial crisis even before the tax refund gets send out by the government.
Many people find tax refund loans quite beneficial since they are given access to funds before the release date of the refunds.
Below are the advantages of applying for a refund anticipation loan.
Fills the gap
Like what was mentioned earlier, a lot of people are having cash flow problems, and the only solution that they can think of is the money that they are getting from their tax refunds. However, this does not happen in an instant since it requires several forms to be filled up properly. Supporting documents are also necessary, and waiting for the release date of the cash may be too late for the emergency to be resolved.
This is when tax refund loans come in handy as they fill the gap. You can have the needed money in your hands instantly hence you will be able to address the problem right there and then.
Another advantage of taking out a refund anticipation loan is the speedy process. The application will be processed faster as it would with a conventional loan. You can get the cash within 24 to 48 hours, unlike the other financial products that may take up to a week or more.
No credit check
It is true that there so many types of loans out on the market nowadays. But you have to remember that most of them require a credit check. If your history is not so good, then your application is most likely to be denied.
So, if you are currently on a financial crisis, early income tax loans are the best way to go. All you need to do is to find the best lending company and you no longer have to wait until your tax refund gets issued.