Tax Refund Loans

Tax season is in full swing. I'm getting my usual phone calls asking if I'm ready to do a said relative or friends tax return. Believe it or not, I like doing a tax return or two.

Millions of people look froward to their tax refund and have spent that refund 20 times or more before they even get it. Well the marketers or "sharks" have in recent years come up with the brilliant idea of the "Refund anticipation loan". I say brilliant, because it is from the loaners stand point and very very stupid for those taking out the loan. Here's why.

The average effective interest rate on one of these loans is in the triple digits. That is simple outrageous. Here's the best idea related to your tax refund. Fill out a new W-4 at work so there is less taken out of your paycheck. This give you access to your refund every single paycheck. You don't have to wait to get it. Why continue to give the government use of your money for an entire year. Then have them return it to you once a year and they pay you zero percent interest.