Beware of Refund Anticipation Loans

Week of February 02, 2009

Refund Anticipation Loans (RALs) are short-term loans that some of the national tax service companies offer during the time that it takes for the tax preparer to receive the refund check from the IRS -- usually two to three weeks. Military personnel on active duty (and their family members) should be aware that Public Law 109-364 protects them by capping interest on a RAL at 36 percent military APR. The lender is required to ask their military status. The Better Business Bureau (BBB) wants servicemembers to know that it pays to shop around and look for a good deal. Consumers can check out a tax preparer's record of integrity and performance free-of-charge with BBB Reliability Reports, available online at the Better Business Bureau.

To learn more about military taxes, visit the Military.com Tax Center.