Tax returns are often prepared by accountants which are hired by people who want to manage their finances wisely. There are two ways by which accountants prepare tax returns. They either use a refund anticipation loan or a rapid refund. Choosing which of the two is much better is what this article is going to discuss.

Refund Anticipation Loan

People resort to an income tax advance because they can quickly access to their money. This type of loan is prepared by a tax preparation company for people who need instant money. In this type of loan, a tax preparer sets up the proper documents in order to facilitate the process of tax refunds. Using his or her own personal funds to simplify the procedure, this type of loan is often called as predatory lending. That is because it has a higher interest rate. Even if it gives you fast money, it comes with a higher price. You only have to wait for up to ten days to get your money immediately. But for those who are thinking of this option, they should think about the higher service fees that goes with it. It is possible that you will be charged for a few hundred dollars in a few days.

Americans are actually paying for as much as five hundred million dollars every year just to get instant money. This scenario is often aggravated by the fact that those who have lower income tend to choose this type of loan. They are often lured by the promise of getting instant money in a shorter period of time. Refund anticipation loan started way back in 1975. This kind of loan is meant for those who get an earned income credit due to a higher refund amount.

When you look into the exact figures, it is very impractical to have a two hundred dollar interest rate for an eight hundred dollar loan. It is too high a price to pay just to get an immediate cash on your hands. But for those who are in desperate need of cash, they are the ones who are most likely to avail of it.

Rapid Refund

Compared to a refund loan, a rapid refund loan does not give you instant cash. You will get your money in a span of two weeks or maybe less. This type of loan is made in an accounting firm using a debit card. Once you are given a debit card, it should be funded with a certain amount within a specific date.

If the debit card is ready, it can now be used to purchase any products or withdraw cash. It is like any credit card or debit card. All you need to do is enter your PIN which is provided to you when you apply for a rapid refund.

A debit card is issued to people who do not have a checking account or also for those who do not want to divulge information about their checking accounts. It is very important to ask for more details about debit cards because some tax preparers in some areas do not provide this kind of program. So if it is the debit card that you really want, then make sure you express what you need from the start.

Rapid refund is not going to give you an instant money. But the good news is that you will be able to save your money in the long run. You can also get a refund quickly.