Tax Refund Loans: Get an Advance in 2023
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If you need cash while waiting for your income tax refund, some tax preparation services — including Jackson Hewitt, H&R Block and TurboTax — offer 0% interest tax refund loans.
Instead of having an interest rate and repayment terms, the tax preparation service lends you money and the loan is repaid through your return.
Tax refund loans, also called "refund advances," are a way to access your refund early. Tax preparers may charge fees for filing some tax returns. In paying a tax preparer just to get the advance, you’re basically paying to access your own money.
What are tax refund advance loans?
Tax refund advance loans are short-term loans that are repaid through your upcoming IRS tax refund. Loans are usually offered from December through February and amounts can range from $250 to $4,000. The loan amount is deducted from the tax refund once it’s issued. Some loans can be dispersed within 24 hours on a prepaid card or within a few days as a direct deposit to a bank account.
To be eligible for a tax refund loan, you must have your taxes prepared by the company offering the loan, and that might mean you’ll pay a tax preparation fee. Tax preparers have a minimum refund amount requirement to qualify, which can vary by company, and you may get only a portion of your expected refund in advance.
A tax refund loan is an option if you need money quickly, but you can save on fees if you are willing to wait. The IRS partners with tax preparers to offer a free filing option for those who meet the income requirement. It can take three to eight weeks to receive your tax refund, depending on how you file.
Where to get tax refund loans
Jackson Hewitt
Jackson Hewitt offers two refund advances. The Early Refund Advance Loan, which has a 34.22% APR, is available in December 2022, while the No Fee Refund Advance Loan, with a 0% APR, is available starting in January 2023. Republic Bank & Trust Company issues both.
Minimum federal tax refund amount | $600. |
Early Refund Advance Loan amounts | $300, $500 or $1,000. |
No Fee Refund Advance Loan amounts | $500, $750, $1,000, $1,500, $2,500 or $3,500. |
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. |
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. |
Tax preparation fee | In-person filing starts at $59. |
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. |
» MORE: Compare best tax software
H&R Block
H&R Block’s Refund Advance loan is available starting in January 2023 at select office locations. 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. |
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. |
Tax preparation fee | Fees start at $80 and there may be an additional state filing fee. |
Deadline | H&R Block offers the refund advance at participating locations from Jan. 3, 2023, to Feb. 28, 2023. |
Intuit TurboTax
Intuit TurboTax’s refund advance loan is funded by First Century Bank. Unlike other tax preparers, TurboTax allows customers to apply online. If approved, borrowers must open a Credit Karma Money checking account to access the loan.
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 | Funds are deposited into a Credit Karma Money checking account within 15 minutes after your return is accepted. A debit card can take one to two weeks to arrive. |
Requirements | There are several eligibility requirements for the TurboTax refund advance. Here are some of them:
|
Tax preparation fee | TurboTax online products vary from free to $119. |
Deadline | The refund advance loan is available until Feb. 15, 2023. |
» MORE: NerdWallet’s review of TurboTax
How do tax refund loans work?
You submit an application for the tax refund loan when you file your tax return with a tax preparer.
Most tax preparers work with a bank that lends the funds. For example, Republic Bank & Trust Company issues tax refund loans for Jackson Hewitt.
Tax refund loans don’t usually have the same credit score requirements as unsecured loans, but the bank may review an applicant’s credit profile without affecting their credit score.
Qualification can also depend on the amount of your expected refund. Tax refund advance loans require identity verification, a review of your tax return inputs and history.
Once approved, you can typically access the loan amount quickly on a prepaid card, which could come with restrictions and fees of its own, or the funds will be deposited into your bank account.
The tax preparer will deduct the loan amount and interest from your refund when the IRS releases it.
How much does a tax refund loan cost?
Tax preparation fees for 0% interest tax refund loans can vary depending on the complexity of the return.
Let’s say you get a $500 tax refund loan against your refund that arrives a month later. You would be required to pay an $80 tax prep fee to file your taxes and get the loan. This fee is equivalent to an annual percentage rate of 195%. Although, if you were going to pay for tax prep anyway, you might value the loan differently.
Some tax refund loans may have interest charges which can make a small loan feel expensive. If you chose the $500 tax refund loan with Jackson Hewitt’s Early Refund Advance, the loan would have an APR of 34.22%, according to the company’s website. That’s not including tax preparation and prepaid card fees, which can add up on a small loan.
While an advance can be a way to get cash quickly, it may be cheaper to wait for the IRS to send your refund directly to you.
Pros and Cons of tax refund loans
Pros
There’s often no hard credit pull.
Most loans are interest-free.
Funding is fast.
Cons
You will likely have to pay a tax filing fee.
You may be required to open an account or debit card of the tax preparer’s choosing.
The loan is subtracted from IRS tax refund.
Tax refund loan alternatives
You could get a lower rate on the same size loan elsewhere and then use your refund to pay it off.
Loan apps provide a low- or no-fee advance on your paycheck. You can typically borrow up to a few hundred dollars and the app will withdraw the advance amount from your bank account on your next payday. However, loan apps may charge a subscription fee, a fee to get funds faster or ask for an optional tip. These apps can be helpful if you need funds quickly, but they aren’t a long-term solution.
Payday alternative loans. Some credit unions allow their members to get payday alternative loans from $200 to $2,000, depending on the type of loan. These loans have a maximum APR of 28%, with application fees capped at $20.
Online loans. Some online lenders offer small personal loans starting at $1,000 with next-day funding after approval. Rates range from 6% to 36%, and qualifications vary by lender. Good- or excellent-credit borrowers (those with a 690 score or higher) with high incomes and little existing debt qualify for the lowest rates.
Lenders that offer small loans and fast funding
If you don’t expect to get a refund that covers your needs, or you want more time to repay the funds, consider getting a loan with an online lender that offers fast funding.
These lenders can fund a loan within a few business days and have minimum loan amounts between $1,000 and $2,000. Repaying a personal loan on time can help you build credit, but understand the risks before borrowing.
Lender | Minimum loan amount | Time to fund |
$1,000. | Next business day. | |
$1,000. | Next business day. | |
$1,500. | Same day with branch visit. | |
$2,000. | Next business day. | |
$1,000. | One to three days. |
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