H&R Block offers tax refund loan to the military

Posted by Joe on February 18th, 2008

Many online tax preparation services offer so-called "refund anticipation loan" that payout a consumer's anticipated tax refund much more quickly than the IRS typically will. However, due to a 2006 law to help protect members of the military community, those loans are very difficult for military service people to find.

The law in question is meant to prevent companies from charging inflated APRs on loans to members of the military community and caps those rates at 36%. However, most tax refund loans have APRs in the range of 50% or more because they also cover processing and fees associated with providing the service. As a result, many companies that provide tax refund loans cannot afford to offer them to members of the military because their costs are potentially greater than the maximum allowable APR that can be offered.

H&R Block, one of our top rated online tax filing services, has begun offering a "military refund anticipation loan" that is capped at the allowable 36% APR. The loan charges a flat rate of $1.07 per $100. For example, the cost for a $3,000 loan would be $32.10.

In general, we believe that most consumers, whether in the military or not, would be better off waiting the approximately two weeks to receive their tax refund from the IRS because of the additional fees associated with tax refund loans. But, because we also believe choice and options are important, we applaud H&R Block's move to provide this loan option to members of the United States military.

Visit H&R Block's website to learn more about their military refund anticipation loans.

• Top ten reasons to prepare your taxes online and efile in 2008
• $800 million in tax benefits go unclaimed
• Save time, money and hassle with online tax preparation
• HP Upline to close in March; Research alternatives on NextAdvisor.com
• 2008 VoIP trend alert – VoIP services let consumers keep traditional phone service too