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The state Office of Consumer Affairs and Business Regulation has urged taxpayers to shun so-called Refund Anticipation Loans (RALs). In their press release, DOR Commissioner Navjeet K. Bal is quoted as saying, "Paying an interest cost on your refund doesn't add up."

RAL's promise quick delivery of a refund, but usually at a steep price. Right now, the average taxpayer who files their state return electronically and designates direct deposit should expect to receive their entire refund in 3.5 business days. The money you save by waiting just a few days is worth it.

Sure, an RAL lets you walk out the door with money in your pocket, but it is substantially less than you would otherwise receive. The fees charged for RAL's are often more than the cost of having your return prepared.

A refund anticipation loan is also a risky proposition because it must be repaid even if the taxpayer’s refund is denied, less than expected, or frozen. If the taxpayer cannot pay back the RAL, the lender may send the account to a debt collector.

If you tax preparer tries to steer you to an RAL, find one who won't.

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