The promise of immediate cash is hard to pass up, but when it comes to getting your tax refund within 10 days, the costs far outweigh the benefits. Tax refund anticipation loans - sometimes referred to as refund anticipation loans or RALs - may carry annualized interest rates ranging from about 40% to more than 700%.

The Center for Responsible Lending and other major consumer groups have been warning taxpayers for the past few years about these short-term cash advances against income tax refunds.

Last year, a RAL for the average refund of around $2,050 was slapped with about $100 in fees, according to the National Consumer Law Center and Consumer Federation of America. That's not all--you can expect tax preparation fees averaging $120 and an administrative fee of about $30.

An RAL under these terms bears an effective annual percentage rate (APR) of about 187%, or 247% if administrative fees are charged and included in the APR. And if you want the cash instantly, a "same-day" RAL can be had for an extra $20 to $39.

The allure of instant cash can cloud the judgment of anyone who needs or wants the cash now, but most RAL users are those who can least afford to waste money. In 2003, 79% of RAL recipients had adjusted gross incomes of $35,000 or less, according to the Internal Revenue Service.

Each fee seems like a small price to pay for getting cash now, but all the fees combined add up to an outrageous rate for a very short-term loan--usually about 10 days.

What are some alternatives?

• Taxpayers with adjusted gross incomes of $50,000 or less in 2005 can get a tax refund direct-deposited within two weeks. Go to irs.gov and click on "Free File."
• If you qualify for the Earned Income Tax Credit and need help filling out the forms, steer clear of tax preparers who promote RALs. Instead, call 800-829-1040 and ask for the nearest Volunteer Income Tax Assistance (VITA) site. The VITA program offers free tax help to low- to moderate-income ($38,000 and below) people. Volunteers are trained to help prepare basic tax returns, and sites typically are located in libraries, community and neighborhood centers, senior centers, schools, and other convenient locations. Most locations offer free electronic filing.
• If you're strapped for cash, ask your credit union for a short-term loan; the rates are far less expensive than those associated with RALs.