Tax refund loans are a fast form of borrowing against your tax return. But you’ll need to pay for tax preparation costs to access them, and some lenders charge interest on your loan. But it’s a popular type of financing. Millions of Americans apply for them every year, according to the National Consumer Law Center. Here’s how to decide if one is right for you.
What is a tax refund advance loan, and how does it work?
If you’d rather not wait weeks for your tax refund, tax preparation services like TurboTax, Jackson Hewitt and H&R Block offer quick cash in the form of “tax refund loans.” Also known as “refund advances,” tax refund loans are quick turnaround loans that let you access a portion of your refund early — up to $6,500 in some cases.
To get a tax refund loan, you need to file with a tax preparation service that offers them. You can often get your money in minutes after the IRS accepts your return. And there’s no need to make repayments. Once your federal or state refund comes through, the tax service deducts your loan amount from your refund before sending along the rest of your money.
But they’re not free. You must file your taxes through the service offering the loan, which can cost an average of $220 and up. And while most tax refund loans are zero interest, others charge steep interest if you want your funds earlier for the holidays.
Compare tax refund advances
What is a holiday tax refund advance?
Most tax refund loans are available starting in January or February. On the other hand, a “holiday tax refund advance” allows you to access an advance as early as December to help offset your holiday expenses. Most holiday advances are worth $1,200 or less, depending on your income.
To apply for a holiday tax refund, you usually only need a pay stub or proof of income for the year. A tax professional then issues an advance based on your estimated tax return amount — sometimes within minutes. The amount is either credited to a prepaid card or deposited to your banking account within one to five days.
Holiday tax refund advances typically come with higher fees or APRs than a regular tax refund advance — and can reach up to 36% APR. Like a regular tax advance, it’s paid back automatically when the IRS issues your tax refund.
How much does a tax refund advance cost?
The cost of a tax refund advance varies by provider. For starters, expect to pay between $50 and $500 when filing your taxes online or in a store — though it can go higher. And while most tax refund loans don’t come with interest or fees, early holiday tax refund advances have high APRs — typically around 36%.
Prepaid debit card fees
Some services require you to sign up for a prepaid debit card to receive your refund. These cards often come with fees that can sneak up on you — like withdrawal fees, payment fees and even ATM decline fees. Fees are typically small — $2 or $3 for the most part — but they can add up over time, especially if you’re unaware of them.
You might be able to opt out of the prepaid debit card by asking for a check or having your loan deposited directly into your bank account. You probably won’t get your funds as quickly, however.
Where to get tax refund loans
You can apply for an early tax refund loan from these providers.
Turbo Tax
TurboTax offers a $0 fee, 0% APR early refund advance of up to $4,000 to qualifying customers until mid-February. In addition to being completely free, it’s a quick turnaround loan: you could have funds in as little as four minutes after the IRS accepts your tax return. Loans start at $250 and are deposited into a Credit Karma Money checking account or issued to a debit card.
| Minimum federal tax refund amount | $500 |
| Loan amounts | $250–$4,000 |
| APR | 0% |
| Funding time | Within minutes to Credit Karma Money Spend checking account, or one to two weeks for a debit card |
| Requirements | Must e-file your federal tax return with TurboTax by February 15, 2024 |
| Availability | All states except North Carolina, Connecticut, and Illinois |
H&R Block
H&R Block offers a $0 fee, 0% APR refund advance loan from $250 to $3,500 to qualifying customers. If approved, your loan funds can either be sent to a prepaid debit card issued in an H&R Block tax office or to a Spruce account — both of which are available same-day. H&R Block also offers an early holiday loan — but with an APR of 35.9%.
| Minimum federal tax refund amount | $5000 |
| Loan amounts | $250–$3,500 |
| APR | 0% |
| Funding time | Within minutes to a Spruce account, or same-day to a debit card |
| Requirements | Must file your federal tax return with H&R Block by February 29, 2024 |
| Availability | All participating H&R Block offices |
Jackson Hewitt
Jackson Hewitt offers a no-fee tax refund loan up to $6,500 — higher than the maximum amount offered by TurboTax or H&R Block. The company also has an early refund, aka “holiday loan,” that you can qualify for with just pay stubs, but it comes with an estimated 35.53% APR based on a loan duration of 75 days.
| Minimum federal tax refund amount | $500 |
| Loan amounts | $250–$6,500 |
| APR | 0% |
| Funding time | Same-day to a debit account |
| Requirements | Must file your federal tax return with Jackson Hewitt by February 11, 2024 |
| Availability | Participating Jackson Hewitt offices and participating Walmarts |
Liberty Tax
Liberty Tax offers an Easy Advance loan from $500 to $6,250 to eligible taxpayers, with loan funds typically available within 24 hours of IRS acceptance of the tax return. Liberty Tax also offers a small holiday advance loan, available in early December and January. Both loans are subject to interest charges.
| Minimum federal tax refund amount | Not stated |
| Loan amounts | $500–$6,250 |
| APR | Not stated |
| Funding time | Within 24 hours |
| Requirements | Must file your federal tax return with Liberty Tax by February 28, 2024 |
| Availability | Participating Liberty Tax offices |
Who is eligible for a tax refund advance?
It varies by provider, though many have standard eligibility requirements that include factors such as your expected refund amount and creditworthiness.
The five most important factors to qualify are:
- Expected refund amount. In general, the expected federal refund must meet a minimum threshold, typically $500.
- Tax preparer. The filer must have their taxes prepared by the company offering the loan to be eligible.
- Filing date. You must get your tax return done by the middle or end of February to qualify.
- Credit score. The underwriting bank may do a soft pull before extending a loan.
- Prior tax return. You may need information from your previous year’s tax refund to qualify for a loan.
How to apply for a tax refund advance
Most tax preparation companies allow you to apply for a tax refund advance either in person or online. If eligible, you can apply for the refund advance at the end of your tax preparation process. If approved, you could receive the loan proceeds within minutes after filing with the provider. The funds may be directed to a prepaid card, a checking account or another method.
Who can benefit from a tax refund advance?
Anyone who relies on tax refunds to cover basic personal expenses might benefit the most from an advance — if your expected refund is high enough to make the filing fee worth it.
You might benefit from a tax refund loan if:
- You claim an Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC). These deductions could mean you’re waiting for more than $6,000 in tax credits that you need to support yourself and your family. However, federal regulations require extra scrutiny for EITC and ACTC claims, possibly delaying your tax refunds.
- You file early. You could get some of your tax refund before the holiday season, a convenience that possibly offsets fees, depending on the service you file with.
- You need the money. Individuals with an immediate need for funds can benefit from receiving up to $6,500 instantly with no loan fees.
Pros and cons of tax refund advances
Pros
- Same-day cash
- Typically no credit pull
- Most loans are zero-interest
- Use it to pay down high-interest debt
Cons
- You have to pay a tax filing fee
- APRs run high on tax refund holiday advances
- You may be required to open a specific checking account or debit card
- The loan is subtracted from IRS tax refund
Is a tax refund advance worth it?
It may be worth it if you’re expecting a big advance and already use a tax preparation service. But if you’re only expecting a return of $500 or $600, you might want to take advantage of one of the many free tax preparation options and take out a personal loan to cover your personal financial needs.
Think about it this way: You’re likely paying at least $100 in tax preparation fees to get a small portion of your $500 return two months faster. When you do the math, that means you’re paying about 20% of your refund for the convenience of using it early.
If you’re considering this route, do the math to make sure it’s worth it for your needs.
What if I’m denied a tax refund advance?
If you’re denied a tax refund advance, most lenders will issue a letter explaining why you were not eligible. Here are some common reasons you may be denied:
- Your tax refund was too low, or you owe money on your return.
- You did not meet the lender’s eligibility requirements for the advance, such as a low credit score.
- You have debt owed to a state or federal institution, such as child support or student loans. You’ll also likely be denied if you have tax debt, in which case you can look into the best tax relief companies instead.
- You did not agree to the lender’s terms and conditions.
It may be worth reaching out to the lender to discuss why you were denied and if anything can be done to reverse that decision. Sometimes the lender is simply missing some documents. If that’s the case, you may still have time to send them in and qualify for an advance. But if you were denied because your credit score is too low, for example, you may have to take steps to improve your credit score and try again during next year’s tax season.
5 alternatives to getting an advance on your tax refund
The fees for filing your taxes in person can be expensive. If your refund isn’t big enough to justify the costs, consider using a free online service and opting for one of these financing options instead:
- Pay advance app. Depending on your income, you may be able to get an advance through a pay advance app. While you may need to pay a fee, it is typically much less expensive than paying the tax filing fee if you have a complicated return.
- Personal loan. If you have one big expense you’re hoping to cover with your tax return, it could be worth it to take out a personal loan for $5,000. Look for a loan that doesn’t come with prepayment fees so that you can pay it off as soon as you get your refund.
- Credit card. Use your credit card to cover day-to-day expenses and then apply your refund to pay off as much of your card’s balance as you can. It could be a bit more expensive than a personal loan, but it might be cheaper than a tax refund loan.
- Direct deposit for your refund. You won’t get your refund months in advance, but you can get your tax refund a bit faster if you ask for direct deposit instead of a physical check when filing your taxes.
- Short-term loan. Payday loans come with more risk. But if you can afford to make payments on time and can’t qualify for another option, a short-term loan that you pay back within a few weeks or months might be able to help you during an emergency.
Before a government crackdown in 2012, you might have come across refund anticipation loans. These loans functioned like a tax refund loan but came with high interest rates and fees on top of any tax prep charges.
It’s harder to find anticipation loans today, but they do exist. Look out for lenders charging:
- Application fees
- Technology fees
- E-filing fees
If you think you might be the victim of a predatory lender, file a report with the Consumer Financial Protection Bureau.
Bottom line
If you rely on your tax refund to cover personal expenses, need it to offset the cost of the holidays or have an emergency that you don’t have the funds to pay for, getting a tax refund loan could be a safer alternative to other types of short-term financing.
But tax refund loans aren’t free. If you weren’t planning on having your taxes filed by an in-store professional, you could be shelling out an additional $150 to $300 for this service, depending on the complexity of your taxes.
You can explore other options with our guide to personal loans.
Frequently asked questions
How long will it take to get my refund after filing my taxes?
For most people, it takes about 21 days to get a tax refund. It could take longer if you file for a tax credit, like the Earned Income Tax Credit or Additional Child Tax Credit.
Can I get a tax refund advance in March?
Probably not — most tax refund advances stop being available at the end of February. However, keep in mind that if you e-file your taxes, you can receive your refund in as little as 11 days.
What happens if I take out a tax loan but don’t get the refund I expected?
You might not have to pay back the difference, depending on your situation. It might be best to consult a lawyer to make sure you’re not liable.
How much does the average tax preparer charge?
The average tax preparation charge to submit a 1040 and state return with no itemized deductions was $220, according to Intuit in 2023. The average cost for the most common type of tax return — the 1040 with Schedule A — and a state return was $323, however.
What can I do if my tax preparer makes a mistake?
First, pay whatever penalties you’re charged by the IRS. Then contact your tax preparer to discuss the situation, file an amended return and ask for reimbursement of your penalties.
If your tax preparer refuses to reimburse you or fix any errors, you might have cause to file a lawsuit, claiming your tax penalties as damages. Carefully read your contract to learn how your preparer handles mistakes, and speak to a professional organization like the American Institute of Certified Public Accountants to learn about potential next steps.
Whats the best loan to take out against my tax refund coming up. I have $5500 in super tax i payed on receiving 18k compassionate grounds payouts this year… Ive been i formed i shoukd recieve most of it back
Hi Brian,
Thanks for your inquiry
I’m afraid we are not permitted to recommend a specific brand to our users to maintain fairness among all the brands we feature on our site. It would be best to compare the options above to find the right loan for you. If you need help preparing your tax, you may want to reach out to a tax preparer to handle this on your behalf.
Hope this information helps
Cheers,
Arnold
Hi Patsy,
Thanks for reaching out to Finder!
Unfortunately, your options are very limited if you don’t have income. Are you collecting Social Security, a pension, or other government benefits? If so, you might be in luck because some lenders consider pension as income.
If not, you might want to check out auto title loans if you own a car, visit a pawn shop or see if you can qualify for a signature loan. These can all be highly expensive, however, and aren’t a great choice unless you absolutely don’t have any other option.
Best,
Anna