When you rely on your tax refund, it can be incredibly difficult to wait until it comes in.  Tax preparation companies count on this, and offer a high fee tax refund loan, often called a refund anticipation loan, that will get your money to you quicker, but at a steep cost.

Taking a tax refund loan can result in very high interest rates, taking a big chunk out of your money for the privilege of getting it a few weeks sooner.  While in some cases, a dire emergency may warrant going for a tax refund loan, most of the time it is simple impatience that causes people to take out these loans.  When you consider that you could be paying hundreds of dollars in fees, it seems hardly worth the cost.

If your home is in foreclosure or you are out of money due to unemployment, a tax refund loan might be worth the fees, but for the majority of us, waiting instead is like having extra money in hand.

Like payday loans, tax refund loans are targeted to people who live paycheck to paycheck.  The thing is, living paycheck to paycheck doesn’t just happen at tax time, so by using the strategies that get you through the rest of the year, you can save on the huge fees of a tax refund loan.

The money you save in fees can be put toward a debt or a treat – if you were planning on getting a loan and change your mind, that money is almost like free money so do with it what you please. 

The bottom line is, getting a refund loan takes huge fees out of your check, so make sure you really need to take out the loan before giving all that money away.