Episode Details

With tax season quickly approaching, you’re probably seeing ads for refund anticipation loans. Refund anticipation loans (also known as refund advance loans or tax refund loans) are a form of secured debt.

A lender (usually a tax preparer) will give you an advance on your tax refund (often up to $3,000). In exchange, the tax preparer will pay the loan back (both principal, interest and fees) when the refund arrives at the preparer’s office. Then the remainder of the refund will then be passed to you. These are some of the pros and cons of taking a tax refund advance loan.

Now, here’s what you need to know about tax refund advances.