What you need to know before signing up for a tax refund loan

Tax Refund Loans: Beware

CINCINNATI, OH (FOX19) - Big tax prep companies are pushing refund advance loans hard right now, with some promising to make those loans interest-free with no fees.

But that’s not the same as free.

Some of America’s biggest tax preparers are offering so-called “Refund Advances” right now. But let’s call these what they really are -- loans. Read the fine print on these offers and you’ll see that you’re actually borrowing money from a bank. And what you borrow will be taken out of your tax refund when you do receive it.

With some of these loans the proceeds are put right onto a credit card. And that may be too tempting for some.

It’s also important to understand that while many of these “refund advance” programs tout being interest and loan-free, you’ll still pay for the tax preparation itself. And the costs of those loans are likely baked into those tax prep fees, which could be several hundred dollars.

The Simply Money Point: The cheapest way to get your money quickly is by using the IRS Free File program and choosing direct deposit. More than 70 percent of American taxpayers qualify to file for free.

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