Predatory Lending Awareness Quiz

10. The maximum annual percentage rate (APR) allowed on a tax refund anticipation loan is 36 percent.

CORRECT

False. In fact, refund anticipation loans issued during the 2008 filing season carried APRs of 50 to 500 percent. With administrative fees calculated into the rate, APRs were as high as 1,300 percent.

Reference:
Wu, C.C. & Fox, J. (2006). Refund Anticipation Loans: Updated Facts and Figures. Boston: Consumer Federation of America. Retrieved on December 31, 2007 from http://www.consumerfed.org/pdfs/RAL_2006_Early_info.pdf.