Getting a personal loan is the best option if you owe tax money to the IRS and you don’t have any money in your savings to pay. You should apply for the loan as soon as you realize that you are not going to have money to pay the tax by the deadline. The IRS can charge you a failure to file penalty fee if you fail to pay your tax by the deadline. The failure to file penalty fee is about 5% of the tax income that you have owed. It is cheaper to get a personal loan to pay your tax than paying it with your credit card.
Credit cards often charge expensive interest rates and you don’t know when you are going to clear off your credit card debts since you can roll the payment from month to month. On the other hand, personal loans have fixed interest rates and low monthly payment amount. With personal loans, you know when you will finish paying off the loan. Additionally, you can avoid tax liens when you use personal loans to pay your tax bill. Any tax liens that have been put forward will be put to an end and the IRS will accept the payment.
Short term loan is the best for people who owe a sum of tax bill that is lesser than $1,000. you can pay back the loan by installment and clear up the debt in about 1 year. The key is to get a loan with a lower interest than the IRS loan. You should not delay in getting a personal loan if you find that this option suits you best. Delaying can cause your tax bill to pile up over time until the sum becomes even larger and harder for you to pay off. Your debt to the IRS will be paid in full when you use a loan to pay it.
You can get either an unsecured or secured personal loan to pay the tax bill. Unsecured loans don’t have collateral but secured loans are tied to a property such as the house. Unsecured loans are safer because you don’t lose your home if you are late in making payment. To be eligible for a personal loan with low-interest rate, you need to have good credit score.
Personal loans applications are fast and straightforward nowadays and you only need to fill a short application form to apply for it. Usually, you need to get pre-approved first to find out the estimate quote for the interest rate. You can fill in more than one form to get pre-approved for several loans and then review the loan offers to see which one is the best for you.