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Refund anticipation loan (RAL) is a short-term consumer loan in the United States provided by a third party against an expected tax refund for the duration it takes the tax authority to pay the refund. The loan term was usually about two to three weeks, related to the time it took the U.S. Internal Revenue Service to deposit refunds in electronic accounts. The loans were designed to make the refund available in as little as 24 hours. They were secured by a taxpayer’s expected tax refund, and designed to offer customers quicker access to funds.

The costs to the borrower could be significant compared to other lending and some consumer organizations warned consumers of the risk involved in this type of loan.<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> They are a largely discontinued financial product and beginning with the 2013 tax filing season, they have been largely replaced with the similar refund anticipation checks (RAC),<ref name=BetterBusinessBureau_Feb.2013>Refund Anticipation Loans Come With Risks, Better Business Bureau, 2/26/2013. ' . . The Federal Deposit Insurance Corporation has forced all major national banks to discontinue these types of loans. Be wary of sketchy lenders, both online and off. . '</ref><ref name=KGET_Feb.2013>Tax refund offers include extra fees, KGET [California], Feb. 7, 2013. ' . . "They have to disclose all the fees so make sure you carefully read any papers that you sign, giving them rights to your refund, because that's exactly what you're doing," said Hudson [Katy Hudson, Consumer Credit Counseling Services President]. . '</ref> as well as a hodge podge of other financial products.<ref name=CNNMoney_March_6_2013>New tax refund loans carry sky-high fees and rates, CNNMoney, Blake Ellis, March 6, 2013.</ref>

RACs are temporary accounts which wait for the client's IRS tax refund, and which also provides a way for the client to pay for tax preparation out of the refund. Both financial products have similar fees and similar risks of third-party bank "cross-collection".

A similar process in Canada to a RAL is termed "tax rebate discounting".


Refund anticipation loan sections
Intro  United States  History  Controversy  Third-party cross-collection of bank debt (\"previous debt\") for both RALs and RACs  Jan. 2011: IRS will not be providing \u201cdebt indicator\"  Jan. 2013: Major U.S. banks stop offering RALs  See also  References  Articles  External links  

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Refund anticipation loan (RAL) is a short-term consumer loan in the United States provided by a third party against an expected tax refund for the duration it takes the tax authority to pay the refund. The loan term was usually about two to three weeks, related to the time it took the U.S. Internal Revenue Service to deposit refunds in electronic accounts. The loans were designed to make the refund available in as little as 24 hours. They were secured by a taxpayer’s expected tax refund, and designed to offer customers quicker access to funds.

The costs to the borrower could be significant compared to other lending and some consumer organizations warned consumers of the risk involved in this type of loan.<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> They are a largely discontinued financial product and beginning with the 2013 tax filing season, they have been largely replaced with the similar refund anticipation checks (RAC),<ref name=BetterBusinessBureau_Feb.2013>Refund Anticipation Loans Come With Risks, Better Business Bureau, 2/26/2013. ' . . The Federal Deposit Insurance Corporation has forced all major national banks to discontinue these types of loans. Be wary of sketchy lenders, both online and off. . '</ref><ref name=KGET_Feb.2013>Tax refund offers include extra fees, KGET [California], Feb. 7, 2013. ' . . "They have to disclose all the fees so make sure you carefully read any papers that you sign, giving them rights to your refund, because that's exactly what you're doing," said Hudson [Katy Hudson, Consumer Credit Counseling Services President]. . '</ref> as well as a hodge podge of other financial products.<ref name=CNNMoney_March_6_2013>New tax refund loans carry sky-high fees and rates, CNNMoney, Blake Ellis, March 6, 2013.</ref>

RACs are temporary accounts which wait for the client's IRS tax refund, and which also provides a way for the client to pay for tax preparation out of the refund. Both financial products have similar fees and similar risks of third-party bank "cross-collection".

A similar process in Canada to a RAL is termed "tax rebate discounting".


Refund anticipation loan sections
Intro  United States  History  Controversy  Third-party cross-collection of bank debt (\"previous debt\") for both RALs and RACs  Jan. 2011: IRS will not be providing \u201cdebt indicator\"  Jan. 2013: Major U.S. banks stop offering RALs  See also  References  Articles  External links  

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