Tax preparation services such as H&R Block make a tidy profit each year on tax refund loans. Basically, customers sign up for these when they don’t want to wait for their actual tax refunds from the IRS to arrive in their mailboxes.

The problem is that tax refund loans, also known as refund anticipation loans, don’t come free. The companies that provide them charge interest rates, often high ones. They might also charge service fees, fees that can also be rather high. In other words, if you can’t wait for your real tax refund, you’ll be getting less money, far less money in some cases, in your pocket with a tax refund loan.

This is why public advocates want to see state governments pass regulations governing the way tax refund loans operate. Basically, these advocates want to cap the interest rates that companies can charge for these loans. Critics say that the companies passing out tax refund loans are preying disproportionately on poor taxpayers. Many of these people are desperate for quick cash to keep the heat on in their homes or to keep food on the family dinner table.

They’re desperate, desperate enough to overlook the often exorbitant interest rates that tax refund loan providers charge them.

In many ways, the criticisms levied at companies who provide tax refund loans mirror those used against companies that originate payday loans. These two loan types, too, have more than a few similarities. They both come with high interest rates, and they both have drawn the ire of consumer advocates.

If you can at all avoid having to take out a tax refund loan, you’ll end up ahead of the game. Why throw away your money on high interest rates or fees? Wait for your real tax refund if at all possible. The government is fairly quick when it comes to sending out refund checks. Can’t you wait two or three weeks if it means that you’ll receive a larger check?

The companies that pass out tax refund loans know that they’re a bad deal. Deep down, you probably know this, too. Don’t make a costly mistake. Avoid the temptation to sign up for a tax anticipation loan. You’re entitled to a refund. Just make sure you get all of it.