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Fast Loans are among the few most popular forms of lending in the UK, as well as in Europe over the last few years. They have many features that make them a credit product that is very different from mortgage credit but at the same time somewhat similar to consumer credit. The main feature of these loans is that, although some banks offer fast loans, they are rather a specialty of companies and quick lending. Today, different forms of payday loans are designed to meet the different needs of different people. Today we tell you about a new type of quick loans and these are tax refund advance loans.

Tax Preparation Firms Use Zero Interest Loans As Lead Generator

The new loan product is helping Americans get quick access to cash but it is not entirely free.

With tax season around the corner, you might have noticed a deluge of Jon Hamm commercials for interest-free tax refund advance loans. This is a newer product used by tax preparation firms to build their customer base around tax season.

H&R Block, Jackson Hewitt, Liberty Tax Service and more recently Credit Karma all market interest-free advances on your tax refund. The process is simple and the loans are paid back to the tax preparer when your refund comes back from the government.

The process for tax preparers differs slightly from firm to firm. You first need to make an appointment with a tax professional and go into the office since the product is not available online. Credit Karma’s Earlybird Advance product is the only one to offer the advance online. After completing your refund you will then have the option to fill out a refund advance application.

Advance loan application

The refund advance application goes through an underwriting process at a partner bank. In the case of H&R Block, their prequalification process reads: BofI Federal Bank, the lender for Refund Advance, will evaluate whether you are eligible to apply for the Refund Advance loan based in part on your tax situation from last year and certain eligibility criteria determined by the bank. This offer is not guaranteed, so if your tax situation or other relevant inputs change, your prequalification to apply could change.

The marketing for these loans promises fast cash in the amount of up to $3,000. While that amount is possible applicants are more likely to see far less. Loan amounts can range from $100 to $500 on the lower end to $2,500 to $3,275 on the higher end. Most applicants looking for the fast cast after the holiday season tend to use their refunds to pay down debt.

I don’t think we will see any of the major online lending platforms offering a similar service but it is an interesting new development nonetheless. Click To Tweet

 

 

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