RAL's Research Paper Example | Topics and Well Written Essays - 2750 words

RALs - Research Paper ExampleIn spite of the high fees associated with RALs, most of those coming from the miserable families are the ones who usually apply for it. There is an on-going battle between the government, the consumer advocates and impose preparation companies on the move offering of Refund prospicience Loans. Part I Refund farsightedness Loans (RALs) Defined A retrovert forethought loan is a type of short term loan that is applied by a valuatepayer, who wants an early claim on his tax pay. The amount that is acquired through the loan will be repaid by the taxpayers anticipated tax refund. It whitethorn also be called as Rapid Refund or Instant Money. A contract is provided by the financial institution to be signed by the taxpayer that serves as an assurance that the loan will be paid back through the taxpayers tax refund (Refund prospicience Loan Fraud). Common interest rates for RALs start from 50% up to over 500%, the basis of which is the length of the time that is needed to process tax forms at the Internal Revenue Services (IRS), that is According to the Center for Responsible Lending. Although this type of loan has been claimed as a way for taxpayers to prevail their tax refunds earlier in their pockets, more often than not it is advanced notwithstanding for sightly a few days or less as compared to the actual date that the IRS releases the tax refund (Tax Refund Resources for Consumers). RALs give taxpayers the opportunity to get their tax refund at a sooner date and be able to use the money earlier rather than waiting for a couple more days. Even so, problems occur when someone opts to use a refund prediction loan. Basically the lender knows that the money dramatizeed will be paid no matter what since the guarantee is the taxpayers tax refund therefore, it is considered as a safer type of loan compared to the other types, but then risking everything just to get the money sooner seems to not sound good at all (Pritchard). Refu nd Anticipation Loans reflect the taxpayers income tax return. Those who would want to avail of this underside apply in banks or lenders if they cant wait till the IRS distributes the tax refunds (Advantages of Refund Anticipation Loan). Some Advantages of Refund Anticipation Loan Speed It will take just a couple of days for the borrowed money to carry through the borrowers hands. So for those who will encounter any emergencies and are desperately in need, a refund anticipation loan is an instant solution to their problems, instead of waiting for weeks or months from the government (Advantages of a Refund Anticipation Loan). Ease While some people struggle to find companies that will allow them to borrow money due to a bad credit history or the incapacity to pay, with RAL s it may not be that difficult. Simply because there is security on the lenders part that the borrowed money is repaid through the tax refund, so getting the loan application approved is not at all hard (Advantag es of a Refund Anticipation Loan). Fees Fees for services rendered are instantly deducted by the tax preparer from the refund. This could be preferential to those who cannot even afford the fees that professional tax preparation companies charge (Deutch). Disadvantages of Refund Anticipation Loans It may be the solution to some peoples financial problem, but still there are things that have to be considered