LITTLE ROCK – Arkansans risk higher costs when using refund anticipation loans as a resource to plan for a tax refund this year. Some businesses are even offering refund anticipation loans (RALs) or refund anticipation checks (RACs) to offset the costs of larger purchases, but the interest rates offered may use more of the refund than expected, according to a news release.

“Refund anticipation loans and checks are just that, the anticipated amount of the tax refund,” said Arkansas Attorney General Leslie Rutledge. “A tax refund could be larger than anticipated, it could also be much smaller and leave consumers on the hook for the rest of the cost of the purchase. I encourage Arkansans to practice patience and wait for the government to issue any refund.”

Attorney General Rutledge released the following considerations before agreeing to have taxes prepared as part of a refund anticipation loan:

Free or low-cost options such as the online Internal Revenue Service (IRS) Free File program or the Volunteer Income Tax Assistance may be options.

Electronically-filed returns can be deposited in bank accounts in as few as eight days.

The IRS can also provide refunds by check or prepaid debit card.

Always get a written list of fees before entering into any agreement or requesting tax preparation assistance.

RALs are high-interest loans that must be repaid by the actual tax return proceeds, essentially borrowing the buyer’s own money. If the actual tax refund amount is less than estimated, the buyer is on the hook for the difference. RACs may be attractive to some consumers because businesses often waive tax preparation fees, but many Arkansans can obtain free tax preparation services.

The IRS provides a Free File program online that is a federal tax preparation and electronic-filing program for taxpayers who earn less than $66,000. Eligible consumers can go to and choose from multiple private companies that will file federal returns at no charge. Some Arkansans may also be eligible to receive free help through the Volunteer Income Tax Assistance program. Meanwhile, seniors can contact AARP to learn more about the tax preparation services it provides.

Arkansas’s “Refund Anticipation Loan Act” requires rates to be posted and clearly stated for all consumers to see, and, among other requirements, it requires a written statement to consumers explaining the loan or check-issuing process. Those offering Refund Anticipation Loans are prohibited from charging additional fees or requiring consumers to take out such loans in exchange for tax services.

For more information about other common scams and consumer-related issues, please call the Arkansas Attorney General’s office at (800) 482-8982 or visit or