A (Tax) Refund Anticipation Loan (RAL) is a high interest rate short-term loan secured by a taxpayer's expected tax refund. Commonly, the taxpayer applies for the loan through a paid tax preparation firm. The tax preparation firm receives a fee for each loan originated, but US Internal Revenue Service rules prohibit basing this fee on the amount of the expected refund. Only the banks through which the loan is made are allowed to charge interest or finance charges.
In simple term tax refund loan is a loan from a bank in the amount of your tax retund and it will limited up to $7500. After approval of your RAL, all fees are deducted from the loan and the remaining balance of the loan is disbursed to you within 24 to 48 hrs via direct deposit to your personal back account or by check. You can also use your refund to pay back the loan.
