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While a tax refund might put a substantial amount of money back in your pocket — the average refund for the 2020 filing season was $2,535, according to the IRS. However, it typically takes six to eight weeks to receive your refund.
If you need your tax refund more quickly, a tax refund advance loan could get you early access to some of your refund. But there are some downsides to keep in mind.
Here’s what to know if you’re considering a tax refund advance:
- How a tax refund advance works
- Where to get a tax refund advance
- Personal loan vs. tax refund advance
- Other tax refund advance alternatives
- Compare offers to get the best deal
How a tax refund advance works
A tax refund advance loan lets you access some of your expected tax refund early — often within 24 hours, depending on the tax preparation company you choose. Many tax refund advance services also come with no interest or fees.
After your refund is processed by the IRS, you’ll repay the tax company the amount you borrowed in advance while keeping the remainder of your refund.
And unlike other types of credit (like credit cards or personal loans), you won’t have to worry about paying higher interest charges if you have less-than-perfect credit.
However, there are some drawbacks to consider:
- Your tax refund could be less than you expect. Your tax refund advance is based on your expected refund. However, keep in mind that the IRS could deny certain deductions that you claimed or find errors that reduce the amount of your refund. If your refund turns out to be less than you expected, you’ll have to repay the difference to the lender.
- You typically can’t access your full refund. Most tax preparation companies only let you borrow a portion of your expected refund. For example, if your expected refund is $3,000, you might only be eligible for a $1,500 loan.
- There’s usually a cost to file your tax return. While tax refund advances are often advertised as having 0% interest and no fees, that doesn’t mean the loan is free. Tax preparation companies typically charge you a fee to file your returns, which you’ll have to pay to qualify for a tax refund advance. Prices often start at $30 to $40 for a federal tax return (depending on the company), with additional fees if you need to file a state return or have a complex return. If you don’t pay these fees upfront and choose to have them deducted from your refund later, you might have to pay another fee to get a tax refund advance loan.
- There might be fees to load your refund onto a debit card. Many companies will load your refund advance onto a debit card. However, these cards might come with additional fees, such as for ATM or over-the-counter withdrawals or account inactivity.
Learn More: How to Get a $5,000 Loan
Where to get a tax refund advance
Many tax preparation companies offer tax refund advance loans, including the following major businesses. Note that none of these are Credible partners.
| H&R Block | Jackson Hewitt | TurboTax | |
|---|---|---|---|
| Loan amounts | Up to $3,500 | $500 to $6,000 (depending on loan type and customer relationship) | $250 to $3,000 |
| Time to fund | Same day as filing, if approved |
| Typically within 3 hours of approval |
| Fees | None | $0 to 2.5% of loan amount (depending on loan type) | None |
| Basic eligibility |
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| Applications open | Jan. 4, 2021 to Feb. 28. 2021 |
| Beginning late Jan. 2021 |
Check Out: Where to Get a Personal Loan
Personal loan vs. tax refund advance
If you need to borrow money, a personal loan could be another option. Personal loans typically offer higher loan amounts than tax refund advances — for example, you might be able to borrow as much as $100,000 or more, depending on the lender.
And unlike tax refund advance loans, personal loans are available at any time of the year.
If you’re considering a personal loan vs. a tax refund advance, here are several points to keep in mind:
| Personal loans | Tax refund advances | |
|---|---|---|
| Loan amounts | $600 to $100,000 (with Credible partner lenders) | Typically $200 to $4,000 (Possibly higher, depending on the company) |
| Fees | Might come with origination fees | Generally no origination fee or APR (Though there might be a fee if you don’t pay your filing charge upfront) |
| Credit score requirements | Typically need good to excellent credit (670 and higher) (Though some lenders provide options for poor and fair credit) | All credit scores accepted (Including no credit history) |
| Loan disbursement | Typically within 7 business days (Depending on the lender) | A few hours up to five business days (Depending on the company) |
Keep in mind that most personal loan lenders don’t charge prepayment penalties. This means you likely won’t have to worry about paying extra fees if you pay your loan off early.If you take out a personal loan instead of a tax refund advance, you could use your tax refund to pay off your loan later on, too.
If you decide to get a personal loan, be sure to consider as many lenders as possible to find the right loan for you. Credible makes this easy — you can compare your prequalified rates from our partner lenders in the table below in two minutes.
| Lender | Fixed rates | Loan amounts | Min. credit score | Fees |
|---|---|---|---|---|
 View details | 9.95% - 35.99% APR | $2,000 to $35,000** | 550 | Yes, origination fee |
*If approved, the actual loan terms that a customer qualifies for may vary based on credit determination, state law, and other factors. Minimum loan amounts vary by state. **Example: A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33. |
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 View details | 6.49% - 29.99% APR | $5,000 to $35,000 | 740 | No prepayment penalty |
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 View details | 5.99% - 29.99% APR | $5,000 to $35,000 | 600 | Yes, origination fee |
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 View details | 6.99% - 24.99% APR | $2,500 to $35,000 | 660 | None, as long as you pay on time |
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 View details | 7.99% - 29.99% APR | $10,000 to $35,000 | Not disclosed by lender | Yes, origination fee |
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 View details | 10.68% - 35.89% APR | $1,000 to $40,000 | 600 | Yes, origination fee |
LendingClub personal loans review †Based on a majority of borrowers from LendingClub's marketing partners who were issued loans between 1/1/19-12/13/19. The time it takes for your loan to be funded may vary. |
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 View details | 15.49% - 35.99% APR | $2,000 to $25,000 | 580 | Yes, origination fee |
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 View details | 3.99% - 19.99% APR | $5,000 to $100,000 | 660 | None |
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 View details | 6.99% - 19.99% APR1 | $3,500 to $40,0002 | 660 (TransUnion FICO®️ Score 9) | None |
1Rate reduction of 0.25% when enrolled in autopay. 2You may be required to have some of your funds sent directly to pay off outstanding unsecured debt. 3After making 12 or more consecutive monthly payments, you can defer one payment as long as you have made all your prior payments in full and on time. Marcus will waive any interest incurred during the deferral and extend your loan by one month (you will pay interest during this extra month). Your payments resume as usual after your deferral. Advance notice is required. See loan agreement for details. 4Your loan terms are not guaranteed and are subject to our verification of your identity and credit information. To obtain a loan, you must submit additional documentation including an application that may affect your credit score. Rates will vary based on many factors, such as your creditworthiness (for example, credit score and credit history) and the length of your loan (for example, rates for 36 month loans are generally lower than rates for 72 month loans).Your maximum loan amount may vary depending on your loan purpose, income and creditworthiness. Your verifiable income must support your ability to repay your loan. Marcus by Goldman Sachs is a brand of Goldman Sachs Bank USA and all loans are issued by Goldman Sachs Bank USA, Salt Lake City Branch. Applications are subject to additional terms and conditions. |
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 View details | 18.00% - 35.99% APR | $1,500 to $20,000 | None | Yes, origination fee |
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 View details | 5.99% - 24.99% APR | $5,000 to $40,000 | 640 | Yes, origination fee |
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 View details | 5.99% - 17.99% APR | $600 to $20,000 (depending on loan term) | 670 | None |
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 View details | 6.95% - 35.99% APR | $2,000 to $40,000 | 640 | Yes, origination fee |
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 View details | 5.99% - 18.83% APR | $5,000 to $100,000 | Does not disclose | None |
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 View details | 5.94% - 35.97% APR | $1,000 to $50,000 | 580 | Yes, origination fee |
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 View details | 8.27% - 35.99% APR4 | $1,000 to $50,0005 | 580 | Yes, origination fee |
4The full range of available rates varies by state. The average 3-year loan offered across all lenders using the Upstart platform will have an APR of 25.79% and 36 monthly payments of $37 per $1,000 borrowed. There is no down payment and no prepayment penalty. Average APR is calculated based on 3-year rates offered in the last 1 month. Your APR will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will be approved. 5This offer is conditioned on final approval based on our consideration and verification of financial and non-financial information. Rate and loan amount are subject to change based upon information received in your full application. This offer may be accepted only by the person identified in this offer, who is old enough to legally enter into contract for the extension of credit, a US citizen or permanent resident, and a current resident of the US. Duplicate offers received are void. Closing your loan is contingent on your meeting our eligibility requirements, our verification of your information, and your agreement to the terms and conditions on the www.upstart.com website. Your loan amount will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will qualify for the full amount. Loans are not available in West Virginia or Iowa. The minimum loan amount in MA is $7,000. The minimum loan amount in Ohio is $6,000. The minimum loan amount in NM is $5100. The minimum loan amount in GA is $3,100. 6If you accept your loan by 5pm EST (not including weekends or holidays), you will receive your funds the next business day. Loans used to fund education related expenses are subject to a 3 business day wait period between loan acceptance and funding in accordance with federal law. |
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Keep Reading: Is Using a Personal Loan for Taxes a Good Idea?
Other tax refund advance alternatives
If a personal loan or tax refund advance doesn’t seem right for your needs, you might be considering other fast loan options, such as payday loans, pawn shop loans, or car title loans.
However, while these same-day loans might get you quick cash, they should only be used as a last resort. These types of loans typically come with sky-high fees and interest rates — often in the triple digits.
Plus, you’ll generally have to repay the loan in a matter of weeks, which might not give you enough time to pay it off without getting further into debt.
Another option is applying with a cosigner. Not all lenders allow cosigners on personal loans, but some do. Having a creditworthy cosigner could help improve your chances of getting approved for a loan.
Even if you don’t need a cosigner to qualify, having one could get you a lower interest rate than you’d get on your own.
No matter which loan option you choose, it’s a good idea to consider how much the loan will cost you over time. You can estimate how much you’ll pay for a loan using our personal loan calculator below.
Enter your loan information to calculate how much you could pay
With a $ loan, you will pay $ monthly and a total of $ in interest over the life of your loan. You will pay a total of $ over the life of the loan.
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Compare offers to get the best deal
In general, it’s a good idea to consider as many loan options — such as tax refund advances and personal loan offers — as you can. This way, you can find a loan that best suits your needs.
If you decide to take out a personal loan, remember to compare as many lenders as possible. Consider not only rates but also repayment terms and any fees charged by the lender.
Credible makes comparing lenders easy — you can see your prequalified rates from multiple lenders in two minutes without affecting your credit score.
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