Loan Against Your Tax Refund: How Much Does It Cost to Get a Tax Refund Early?

If the tax preparation service you select offers “tax advance refund,” you may be able to use your tax refund as collateral for a loan. However, tax preparation companies do not lend you money directly; rather, they work with banks that provide the funds.

When you receive your tax refund, the bank receives the borrowed amount or a portion of it in order to redeem the loan. Frequently, tax refund advances are advertised as having no fees or interest.

These loans may be useful if you need cash immediately rather than waiting for your tax refund. However, it is essential to evaluate the terms and conditions before applying.

How to Apply to Get a Loan Against Your Tax Refund?

Several companies that help people with their taxes, like H&R Block, Jackson Hewitt, and Liberty Tax, let their customers borrow money against their future U.S. tax returns. You can apply for a loan at one of these companies’ many physical sites or online. If you do your own taxes, you don’t have to go to a tax preparer to get a loan against your tax return.

Loan Against Your Tax Refund: How Much Does It Cost to Get a Tax Refund Early?

Online tax filings services like TurboTax and TaxAct also offer ways to get a loan against your tax refund.

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How to Get an Advance on a Tax Refund?

Tax return loans are a good choice because you can get the money you are owed from the government quickly. Depending on the lender you choose, the money could be in your hands 24 hours after you apply. This is a big improvement over the six to eight weeks it usually takes the IRS to send a check for a tax refund when a paper return is sent in.

When you file electronically with the IRS, it usually takes less than three weeks, and direct payments can speed up the process even more. But when you have bills to pay, it can be hard to wait for a return.

If you think you will get a tax return, you can apply for a loan. But most lenders won’t give you the full amount of your tax refund. Instead, they’ll cap the loan at a lower amount in case the amount you thought you’d get back is wrong.

The lowest and maximum loan amounts are also set by each lender. For example, Jackson Hewitt refund loans range from $200 to $3,200, while TurboTax offers credits from $250 to $2,000. If there is a mistake on your tax forms, you may get less money back than you thought.

If you borrowed more than the amount of your return, you will have to pay back the extra. Some lenders may cover the difference, but you need to find out in advance what their rules are.

There are other reasons why your tax return might be less than you thought, besides mistakes on your tax forms. For example, the IRS could reject some of your benefits, which would mean you owe more taxes. The IRS may keep all or part of your return if you are behind on child support payments or have a tax lien.

How Much Does It Cost to Get a Tax Refund Early?

Most companies that help people with their taxes offer tax return advances without interest or extra fees. Most of the time, though, the cost is built into the service fee you pay. For example, if you use H&R Block to file your taxes, it may cost you more than their usual fee of $59.

Be aware of any extra fees that might be added to your return loan. If you get your loan on a prepaid debit card, you may have to pay a small fee. If your income is less than $69,000, you can do your own taxes using free tools from the IRS and avoid having to pay a fee. If your salary is more than that amount, you can use their fillable forms for free.

If you don’t want to need a refund loan, plan to file your taxes early, so you can get your reward faster.

Can I Get an Advance on My Tax Return if I Have Bad Credit?

Most of the time, you don’t need to have good credit to get a tax return loan. Since you are borrowing against the money you will get from the government, a tax refund loan doesn’t pose the same amount of risk to lenders as a traditional loan or line of credit.

But some companies may use lenders who do a full credit check, which shows up as a “hard inquiry” on your credit report and can have a short-term effect on your credit score. But if they only do a soft inquiry or don’t check your credit at all, it won’t hurt your credit records or score.

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Loan Against Your Tax Refund: How Much Does It Cost to Get a Tax Refund Early?


If you need your tax refund quickly and were already going to use a tax preparer, getting a tax refund loan may not be a bad idea. If you use the loan to pay off other debts, it could even help your credit score. Before making a decision, look at your credit report from Experian to figure out how good your credit is and which bills you should pay off first.

But you should think about all the costs, including any extra fees, and only get a tax return loan if it’s the best choice. If you can’t get a tax refund loan, you could apply for a credit card with a 0% APR offer or a personal loan with low interest.

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