Let’s be honest — waiting for your tax refund isn’t fun. Whether you’re dealing with an unexpected expense or want to access your refund ASAP, a tax refund loan might be just the ticket. But how do they work? Do they make sense for you? Are they worth considering? Let’s break down everything to know about a tax refund advance.
PRO TIP! If you don’t want to get a tax refund loan, see if you qualify to access up to $500 of your pay, any day with MoneyLion Instacash®. No interest. No credit check. No mandatory fees.*
Table of contents
What is a tax refund loan?
A tax refund loan, also called a refund anticipation loan or a tax refund advance, is essentially a shortcut to your tax refund. Instead of waiting weeks for the IRS to process your return, lenders give you an advance on the amount you’re expecting. Once your refund arrives, they deduct the loan amount automatically, so there’s no extra hassle.
- Funding amounts can often be as high as $4,000
- These loans are typically offered by tax preparation companies during tax season.
- They’re designed to provide instant tax refunds to taxpayers while they wait for the IRS to process their refunds.
- Unlike traditional tax loans, these are directly tied to your anticipated tax refund.
Think of it like borrowing from your future self, but with a catch — you’ll need to file your taxes through a provider offering these loans, like TurboTax or Jackson Hewitt.
The good news? Many of these loans don’t require a credit check, which makes them accessible to most folks. But be warned – they can come with additional costs that can outweigh the benefits.
How does a tax refund advance even work?
A tax refund advance is a short-term loan based on your expected tax refund. Here’s how it works:
First: You’ll need to file your taxes with a company offering refund loans. Once your expected refund is calculated, they’ll let you know how much you can borrow.
Second: Once approved, the money will be sent to you —often within 48 hours after filing— via direct deposit, prepaid card, or even a check.
Third: When your actual tax refund arrives, it will go to the lender to repay the advance. Any remaining funds from your tax refund will then be sent to you
The process is straightforward, but the terms can vary. Fees typically range from $25-50, plus any tax preparation charges, though some services advertise “no fee” advances but make money on tax preparation instead.
Where to get a tax refund advance
Looking for who offers refund anticipation loans? Here are some major players:
- Jackson Hewitt Tax Service: Offers early tax advances up to $3,500. Funds can be loaded onto a prepaid card for instant access.
- H&R Block: Their refund anticipation loans range from $250 to $4,000 and is available within minutes of filing your taxes with $0 fees and 0% APR.
- TurboTax: Provides a refund advance loan up to $4,000 with 0% APR, and funds are delivered via prepaid cards.
Each provider has different terms and fees, so compare options carefully before deciding.
Pros and cons of income tax refund loan
Convenient? Yes. Perfect? Not quite — income tax loans have trade-offs. As they say, there’s more to the story.
| Pros | Cons |
| Get your refund right away instead of waiting weeks for the IRS. | Loans with fees or interest can significantly cut into your refund. |
| Many income tax advance loans don’t require good credit. | You may need a minimum refund amount to qualify. |
| File taxes and apply for a loan in one sitting. | If your refund is delayed, you may need to repay the loan out of pocket. |
Are the fees and interests on a tax refund advance worth it?
Here’s the thing: a tax refund advance can certainly be helpful if you’re in a tight spot and need cash quickly. Some emergencies don’t wait.
For example, maybe you’ve got an unexpected car repair, or perhaps there’s a sale on something you’ve been eyeing for months. A tax refund loan can give you the flexibility to act now.
But — and this is a big but — these loans aren’t free money. While some are fee-free, others come with costs that can eat into your refund.
Here’s what you would pay for a tax refund advance at Jackson Hewitt. Some providers offer interest-free loans, but others charge high APRs. As always, read the fine print.
| Loan amount | APR | Finance charge |
| $100 | 35.96% | $7.39 |
| $500 | 35.96% | $36.95 |
| $1,500 | 35.96% | $110.85 |
Alternatives? Yeah, there are alternatives to tax refund advances
If a refund anticipation loan doesn’t feel like the right fit, there are other ways to bridge the gap until your refund arrives.
👉🏻 Personal loan: A personal loan lets you borrow a set amount of money upfront and repay it over time in fixed monthly installments. Unlike a tax refund advance, personal loans aren’t tied to your tax refund, they’re based on your creditworthiness.
Apply through a bank, credit union, or online lender. Once approved, you’ll receive a lump sum, which can be used for almost any purpose.
For an overview of the types of personal loans you could qualify for, make sure to use MoneyLion. Get matched with offers and compare rates, terms, and fees to choose the best offer for you.
👉🏻 Credit card cash advance: A credit card cash advance allows you to withdraw cash from your credit card’s available credit limit. While it’s a fast way to get cash, the fees and interest rates can add up quickly.
You can withdraw cash at an ATM or your bank using your credit card. The borrowed amount will appear as a balance on your credit card statement.
MoneyLion can help you explore a wide variety of credit card options tailored to different needs and preferences.
👉🏻 Peer-to-peer lending: Peer-to-peer lending platforms connect borrowers directly with individual lenders, bypassing traditional banks. This method can be quicker than traditional loans but often comes with higher interest rates.
Apply on platforms like LendingClub or Prosper by creating a profile and sharing your loan needs. If approved, your loan is funded by one or more investors, and you repay it over time with interest.
👉🏻 Side gigs or freelancing: Another option is to pick up a quick side hustle. Platforms like DoorDash, Fiverr, or Uber let you start earning almost immediately. It might take a little effort, but the extra cash can help cover expenses without dipping into your refund.
Explore gig platforms like Uber, DoorDash, or Fiverr, or monetize your skills through freelance opportunities.
Choosing the Right Option for You
Deciding whether a tax refund loan is worth it depends on your situation. If you need cash urgently and don’t mind giving up a small portion of your refund, it could be a great solution. Just make sure to compare providers like H&R Block, TurboTax, and Jackson Hewitt to find terms that work for you.
But if you’re not in a rush, waiting for your full refund might be the smartest move. After all, it’s your money — if you can avoid it, why pay someone else to access it early?
Take a moment to weigh the pros and cons, explore alternatives, and make a decision that supports your financial goals.
FAQs
Can I get a loan on my tax refund if I already filed?
Yes, you can still apply for a loan on tax refund if you’ve filed through a participating tax preparer.
Who should consider a tax refund loan?
These loans are ideal for taxpayers needing quick access to their refund for urgent expenses.
Do I need good credit to qualify for a tax refund advance?
No, many providers don’t require a credit check for income tax advance loans.
Will a refund loan affect my credit score?
Generally, no. Most tax loans don’t involve a hard credit pull or get reported to credit bureaus.
How quickly can you get the money if you’re approved of the tax refund loan?
Some providers offer same-day funding via prepaid card, direct deposit, or check.
How do you repay a tax refund advance?
The loan is automatically deducted from your refund when the IRS processes your taxes.
