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Refund Anticipation Loan and Tax Refund Loan

Author: Sandeep Singh
by Sandeep Singh
Posted: May 14, 2020

"Taxation is the price which civilized communities pay for the remaining civilized." – Albert Bushnell Hart

A Tax Refund Anticipation Loan (RAL)?

A kind of loan offered by a third-party company against a taxpayer's expected income tax refund, when individuals file their income tax advances, they may get a tax refund to return the excess amount of income tax that a taxpayer has paid to the government, typically through withholding from a paycheck.

How RALs work?

When a customer signs up for the refund anticipation loan online, the revenue service agency sends the money to the financial institution which then pays out the funds to the customer. The loan is an equivalent amount to a person’s federal income tax advances and is repaid by the refund.


If you need money quickly for the short-term, you must consider tax refund loans. If you’re encountering recession and you anticipate a major bill to arrive; then, tax refund loans can help you.


Tax refund loans are not very consumer-friendly and although, they often charge 3-5% interest, but are expensive due to significant fees in addition to the interest charged. If you are looking for a loan that lasts more than a couple of weeks, then filing a refund anticipation loan online is not suitable for you.

Instant Tax Loan

Instant tax loans for your income tax advances are a boon for availing quick services using the following strategies:

File Early

Whether you use a professional or file your own taxes, the key to getting to get a refund for an instant tax loan is filing a refund anticipation loan online early.

E-File Your Return

Whether you do your own taxes or use a professional, make sure you file your refund anticipation loan online and request direct deposit of the refund as they are processed much faster than paper returns.


Tax refund loan is very common in the world nowadays due to the increasing number of business people and freelancers. So tax refund loan or Refund Anticipation Loan (RAL) is the loan offered by third-party companies or lenders against an individual’s expected income. This is very useful for those people who pay tax in advance like in the income tax advances where the person has to pay before the end of that financial year. This is also applicable to instant tax loans also where the people lend money during a particular time of the year. The tax refund loan comes into action because people tend to pay more than their liability while paying income taxes. This happens a lot with business people & freelancers as they pay the tax beforehand.

A Tax Refund Anticipation Loan (RAL) works, when a payee files their income tax form, they will be accredited with a refund form because that person has filed more amount than the liability of the loan. So tax refunds help the person by giving him/her the excess money they have paid to the central or state governments as income tax. This usually happens due to the withholding of paychecks. Now in most countries, the bulk of all the income taxpayers are receiving income tax refunds. People get payments on different modes, and it’s based on country to country. Usually, the most desired way of payment by most people is direct deposits to bank accounts. Because for some, the other modes like government checks or savings bonds are less preferred. It’s given accordingly as the persons demand it. Usually, they get the refund amount within a few weeks. But with Refund Anticipation Loan the person can get their money way faster without much hustle. Here these are not issued by the government; these are issued by third-party organizations. So people who are opting for this loan have to first check the reliability and genuineness of the company before opting for a RAL. But this comes with certain drawbacks like; it’s for a short term only and also the lender charges a small percentage of the refunds.

About the Author

Sandeep Singh is a freelance digital marketing expert. Loves to write on various niches such as technology, WordPress, Laravel, Seo, PPC etc

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Author: Sandeep Singh
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Sandeep Singh

Member since: Aug 23, 2018
Published articles: 20

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