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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 reclaims it through your return.
Tax refund loans, also called "refund advances," are a way to access your refund early. However, note that tax preparers may charge fees for filing some tax returns. In paying a tax preparer just to get the advance, you’re paying to access your own money.
What are tax refund advance loans?
Tax refund advance loans are short-term loans of $200 to $4,000 you take out when you're already anticipating a refund from the IRS. The loan amount is deducted from your refund once it’s issued. In some cases, you can get the money loaded onto a prepaid card within 24 hours. The loans are usually offered from December through February.
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. There’s a minimum amount your expected refund can be to qualify, which can vary by company, and you may get only part of your expected refund in advance.
Where to get tax refund loans
Jackson Hewitt offers two refund advances. The Early Refund Advance Loan has a 35.9% APR and a maximum 71-day term, depending on the state. The No Fee Refund Advance Loan has a 0% APR. Metabank issues both.
Minimum federal tax refund amount: $500.
Early Refund Advance Loan amounts: $200, $500 or $1000, but loan amounts may vary by state.
No Fee Refund Advance Loan amounts: $500, $750, $1,000, $1,500 or $3,500.
Time to funding: Within minutes or up to 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. Both the Early Refund Advance and No Fee Refund Advance Loans require proof of income, but the No Fee Refund Advance Loan also requires a W-2 or other income verification.
Tax preparation fee: Prices start at $59 but vary by the complexity of the returns.
Deadline: The Early Refund Advance is available from Dec. 13, 2021, to Jan. 16, 2022. The No Fee Refund Advance Loan is available from Jan. 2, 2022, to Feb. 20, 2022.
» MORE: Compare best tax software
MetaBank issues H&R Block’s refund advance loan.
Minimum tax refund amount: $500.
Loan amounts: $250, $500, $750, $1,250 or $3,500.
Time to funding: Same day, in most cases. Money is loaded onto an H&R Block prepaid card, from which you can make a one-time transfer of funds by check or ACH for no fee. If you have your taxes prepared in person you can receive the card the same day. You’ll be issued a virtual card if you complete the tax preparation process online. It can take up to 10 business days to get the card by mail.
Requirements: You must have your taxes prepared at a participating H&R Block office, receive a sufficient refund amount and offer required proof of identification. You must also meet certain credit and other underwriting requirements.
Tax preparation fee: Fees start at $69 at most offices and vary depending on the complexity of the tax return.
Deadline: H&R Block offers the refund advance at participating locations from Jan. 3, 2022, to Feb. 28, 2022.
Intuit TurboTax’s refund advance loan is funded by First Century Bank.
Minimum federal tax refund amount: $500, but a higher refund amount makes you eligible for higher loan amounts.
Loan amounts: $250, $500, $750, $1,000, $1,500, $2,000, $2,500, $3,000, $3,500 or $4,000.
Time to funding: You apply for the refund and open a checking account with Credit Karma Money to access the funds. TurboTax says funds are typically deposited into your checking account an hour or two after the return is accepted by the IRS. You’ll receive a debit card in the mail within seven to 14 business days and can make online purchases in the meantime.
Keep the debit card, because TurboTax will put your remaining refund into the checking account upon arrival.
Requirements: There are several eligibility requirements for the TurboTax refund advance.
Here are some of them:
You must file your taxes with TurboTax.
You can’t be a resident of Connecticut, Illinois or North Carolina.
Tax preparation fees: TurboTax online products vary from free to $119.
Deadline: The refund advance loan is available until Feb. 15, 2022.
» 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.
Most tax preparers work with a bank that lends the funds. For example, MetaBank issues tax refund loans for H&R Block and Jackson Hewitt.
Tax 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. These loans require identity verification, a review of your status with the IRS and other debts you owe.
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. » MORE: Lower cost funding alternatives in a crisis
How much does this 'free' loan cost?
Tax preparation fees for 0% interest tax refund loans can vary depending on the complexity of the return.
Let’s say you’re charged a $69 fee to be eligible for a $500 tax refund loan that lasts until your refund arrives a month later. You could consider that fee equivalent to an annual percentage rate of 168%. 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. Jackson Hewitt’s Early Refund Advance loan has an APR of 35.9% in some states, with a maximum loan term of 71 days. A $500 tax refund loan with these terms would cost $35 in interest. 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.
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 $250, 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 access 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 or higher FICO) 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.
Minimum loan amount
Time to fund
Next business day.
Next business day.
Same day with branch visit.
Next business day.
at Best Egg
One to three days.
at Universal Credit
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