Do the places like 'Instant Tax Services' check your credit to give the loans they are offering?

I seen on TV that 'Instant Tax Services' are offering loans with your last pay-stub of ' 08 and they don't go by your credit score.Could this be true? Do they have you sign some kind of form stating you will pay them back from your taxes and they will be doing them.Is that how it works?

They charge you a fee plus interest, usually.

For instance, you see them on Jan 12th and they "calculate" that you will get $1000 back on your tax return on Feb 1st. They charge you $50 plus 10% of that return to loan you that estimated amount early. On Jan 12th they loan you $850.00 which is $1000 minus $50 for their fee and another $100 which is 10% of your total estimated return: $100.

Those are totally round numbers and a basic scenario. It's usually much more complicated than that, with more fees if your return comes in under their estimate and more fees on top of that if you don't get your return on the estimated time.

Basically, it ends up costing you a lot more that if you wait until you actually file. A LOT more.

If you are okay with that, go for it. But it's very similar to a payday loan – you end up loosing a lot of money and would be much better off if you just waited.