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Some tax preparation services, including Jackson Hewitt, H&R Block, and TurboTax, offer 0% interest tax refund loans if you require money while waiting for your income tax refund.
Your loan from the tax preparation service is repaid through your return rather than having an interest rate and repayment terms.
Loans against your tax refund, also known as “refund advances,” are a way to get your money sooner. Tax preparers may charge fees for filing some tax returns. You are essentially paying a tax preparer to access your own money when you pay for the advance.
What are tax refund advance loans?
Short-term loans known as “tax refund advance loans” are paid back with your upcoming IRS tax refund. Loan amounts can range from $250 to $4,000 and are typically made available from December to February. Once the tax refund is issued, the loan amount is subtracted. Some loans can be disbursed as a direct deposit to a bank account or on a prepaid card within 24 hours and a few days, respectively.
You must have your taxes prepared by the business providing the loan in order to be eligible for one, which may require you to pay a tax preparation fee. Companies may have different minimum refund requirements for tax preparers, and you might only receive a portion of your anticipated refund in advance.
If you need money right away, a tax refund loan is an option, but if you can wait, you can avoid fees. For taxpayers who meet the required income threshold, the IRS collaborates with tax preparers to provide a free filing option. Depending on how you file, it could take three to eight weeks to get your tax refund.
Where to get tax refund loans
Jackson Hewitt offers two refund advances. The Early Refund Advance Loan, which has a 34. The 22% APR loan becomes available in December 2022, and the 0% APR No Fee Refund Advance Loan becomes available in January 2023. Republic Bank & Trust Company issues both.
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Minimum federal tax refund amount |
$600. |
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Early Refund Advance Loan amounts |
$300, $500 or $1,000. |
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No Fee Refund Advance Loan amounts |
$500, $750, $1,000, $1,500, $2,500 or $3,500. |
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Time to funding |
Within 24 hours if you have the money loaded onto a prepaid card. Funding can take one to five business days if you want the loan deposited into a bank account. |
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Requirements |
For a refund advance with Jackson Hewitt, you must have your taxes prepared at a Jackson Hewitt office. The Early Refund Advance requires a recent pay stub. The No Fee Refund Advance Loan requires a W-2 and other tax documents. |
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Tax preparation fee |
In-person filing starts at $59. |
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Deadline |
The Early Refund Advance is available from Dec. 12, 2022, through Jan. 15, 2023. The No Fee Refund Advance Loan is available from Jan. 2, 2023, through Feb. 19, 2023, at certain Jackson Hewitt locations. |
H&R Block
Starting in January 2023, a limited number of H&R Block offices will offer the Refund Advance loan. Pathward issues H&R Block’s Refund Advance loan.
|
Minimum federal tax refund amount |
$500. |
|
Loan amounts |
$250, $500, $750, $1,250 or $3,500. |
|
Time to funding |
Same-day funding in most cases. The loan will be available through an H&R Block prepaid card that you recieve during your appointment. |
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Requirements |
You must have your taxes prepared at a participating H&R Block office, receive a sufficient refund amount and provide proof of identification. You must also meet certain credit and other underwriting requirements. |
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Tax preparation fee |
Fees start at $80 and there may be an additional state filing fee. |
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Deadline |
H&R Block offers the refund advance at participating locations from Jan. 3, 2023, to Feb. 28, 2023. |
Intuit TurboTax
Editor’s note: For the current tax year, Intuit TurboTax has not yet disclosed its advance options. The data below pertains to last year; it will be updated as soon as new data is made available.
First Century Bank provides the funding for Intuit TurboTax’s refund advance loan. Unlike other tax preparers, TurboTax allows customers to apply online. In order to access the loan, applicants must open a Credit Karma Money checking account.
|
Minimum federal tax refund amount |
$500. |
|
Loan amounts |
$250, $500, $750, $1,000, $1,500, $2,000, $2,500, $3,000, $3,500, or $4,000. |
|
Time to funding |
Within 1 hour with a direct deposit to a Credit Karma Money checking account. A Credit Karma Visa® Debit card can take from one to two weeks to arrive. |
|
Requirements |
There are several eligibility requirements for the TurboTax refund advance. Here are two of them:
|
|
Tax preparation fee |
TurboTax online products vary from free to $119. |
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Deadline |
The refund advance loan is available until Feb. 15, 2022. |
How do tax refund loans work?
When you work with a tax preparer to file your return, you must submit an application for the tax refund loan.
The majority of tax preparers work with a bank that provides the funding. For instance, Jackson Hewitt receives loans from Republic Bank & Trust Company for tax refunds.
The bank may review an applicant’s credit profile without affecting their credit score because tax refund loans typically don’t have the same credit score requirements as unsecured loans.
The size of your anticipated refund may have an impact on your eligibility. Verifying your identity and reviewing your tax return’s inputs and history are requirements for tax refund advance loans.
After being accepted, you can frequently quickly access the loan amount on a prepaid card, which might have its own limitations and fees, or the money will be deposited into your bank account.
When the IRS releases your refund, the tax preparer will deduct the loan amount and interest from it.
How much does a tax refund loan cost?
Depending on how complex the return is, tax preparation costs for loans with no interest on tax refunds can change.
Consider receiving a $500 tax refund loan against a subsequent refund that comes a month later. To file your taxes and be eligible for the loan, you would have to pay an $80 tax preparation fee. This cost equates to a 195% yearly percentage rate. Although you might value the loan differently if you were going to pay for tax preparation anyhow.
Interest fees on some tax refund loans can make a small loan seem pricey. If you decided to use Jackson Hewitt’s Early Refund Advance to borrow $500 from your tax refund, the loan’s APR would be 34. 22%, according to the company’s website. Tax preparation and prepaid card fees are excluded from that, which can add up on a small loan.
While getting an advance can be a quick way to get money, it might be less expensive to wait for the IRS to send your refund to you directly.
Pros and Cons of tax refund loans
Tax refund loan alternatives
If you could find a loan of the same size at a lower interest rate, you could pay it back with your refund.
A low- or no-fee advance on your paycheck is offered by loan apps. Typically, you can borrow up to a few hundred dollars, and on your following payday, the app will deduct the advance payment from your bank account. However, some loan apps may have subscription fees, fees for obtaining funds more quickly, or request an optional tip. These apps can be useful if you need money right away, but they aren’t a permanent fix.
Payday alternative loans. Depending on the type of loan, some credit unions enable their members to obtain payday alternative loans from $200 to $2,000. The maximum APR for these loans is 28%, and the application fee is $20.
Online loans. Some online lenders provide $1,000 small personal loans with next-day funding upon approval. Rates range from 6% to 36%, and lender-specific qualifications apply. Borrowers with good or excellent credit (scores of 690 or higher), high incomes, and little existing debt are eligible for the lowest rates.
Lenders that offer small loans and fast funding
Consider obtaining a loan from an online lender that offers quick funding if you don’t anticipate receiving a refund that will cover your needs or you want more time to repay the money.
These lenders have minimum loan amounts between $1,000 and $2,000 and can fund a loan within a few business days. You can improve your credit by making on-time personal loan repayments, but be aware of the risks before borrowing.
|
Lender |
Minimum loan amount |
Time to fund |
|
Upgrade 5.0 NerdWallet rating NerdWallets ratings are determined by our editorial team. The scoring formula takes into account factors we consider to be consumer-friendly, including impact to credit score, rates and fees, customer experience and responsible lending practices. |
$1,000. |
Next business day. |
|
Upstart 4.5 NerdWallet rating NerdWallets ratings are determined by our editorial team. The scoring formula takes into account factors we consider to be consumer-friendly, including impact to credit score, rates and fees, customer experience and responsible lending practices. |
$1,000. |
Next business day. |
|
OneMain 4.0 NerdWallet rating NerdWallets ratings are determined by our editorial team. The scoring formula takes into account factors we consider to be consumer-friendly, including impact to credit score, rates and fees, customer experience and responsible lending practices. |
$1,500. |
Same day with branch visit. |
|
Best Egg 4.5 NerdWallet rating NerdWallets ratings are determined by our editorial team. The scoring formula takes into account factors we consider to be consumer-friendly, including impact to credit score, rates and fees, customer experience and responsible lending practices. |
$2,000. |
Next business day. |
|
Universal Credit 4.5 NerdWallet rating NerdWallets ratings are determined by our editorial team. The scoring formula takes into account factors we consider to be consumer-friendly, including impact to credit score, rates and fees, customer experience and responsible lending practices. |
$1,000. |
One to three days. |
About the author: Annie Millerbernd is a personal loans writer. Her articles have appeared in USA Today and The Associated Press. Read more.
