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Every tax season, consumers across the country hope that when their returns are completed a refund will soon be on the way. Consumers that qualify for the Earned Income Tax Credit (EITC) program are likely among the most anxious to receive their refunds, as it usually represents a significant cash infusion.

Just as consumers wait a full year in hopes of receiving a refund, high-cost and high profit lenders are just as anxious to take substantial amounts from consumers’ hard-earned dollars.

One of the worst offenders are those who offer Refund Anticipation Loans, also known as RALs. Generally offered by banks and tax preparation services, RALs are one of the shortest term loans available and come with some of the highest fees. The loans, backed by turning over your refund to the lender, provide consumers with instant cash—but these consumers then forfeit a sizeable portion of their refund. The larger the refund, the larger the RAL fees.

Consumers using these predatory loans are often unaware that the range of choices now offered by the Internal Revenue Service. Waiting periods for tax refunds are now just a day or two. With options such as e-filing and direct deposits, there is no need to give a bank or tax service your dear dollars.

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