In 2004, over 12 million Americans applied for an RAL, spending over $1.6 billion just so they could get their refund two weeks earlier. The interest rates on RALs are truly shocking: from 40% to 700%(!).
The usual common sense advice applies: if you need your refund as speedily as possible, e-file and get it direct deposited into your bank. Small comfort when a bookie’s threatening to shatter your kneecaps, but the IRS certainly screws us over enough without tipping them 700% interest on the obligatory reaming.
Consumer Group to Taxpayers: Don’t Borrow Your Own Money [Consumer Affairs]