How do tax refund loans work?
You're paying to borrow your own money.
If you have no other way of getting money and need it immediately, a tax refund loan could be a way to avoid other forms of bad debt. If it won't cost you anything. If there are no fees or interest attached to the loan, then it might make sense to access your funds now. If it would cost you more to wait for the money.
To get a tax refund loan, you'll typically need to file your taxes with the preparer that provides the loan. You might be able to do so online, but some firms will require that you file in person. The tax preparer will review your application. Besides your tax return, they may look at your income and credit.
Refund Advance is a loan based upon your anticipated refund and is not the refund itself. 0% APR and $0 loan fees. Availability of the Refund Advance is subject to satisfaction of identity verification, certain security requirements, eligibility criteria, and underwriting standards.
High approval rates
And, you could get approved within minutes of filing.
Reasons For and Against Tax Refund Loans
The most obvious reason to consider a tax refund loan is because you need money quickly and for the short term. Maybe it's February and you have a major bill coming up. Or perhaps your emergency fund isn't quite big enough and you could use the money from your tax refund.
You will not be eligible for the loan if: (1) your physical address is located outside of the United States, a US territory, a PO box or a prison address, (2) your physical address is in one of the following states: IL, CT, or NC, (3) you are less than 18 years old, (4) the tax return filed is on behalf of a deceased ...
H&R Block Emerald Advance® Loan originated by Pathward®, N.A., Member FDIC. Subject to eligibility and credit approval. Annual Percentage Rate (APR) is 35.9%. Loan amounts vary from $350-$1300.
People who have bad credit or limited credit history often struggle to take out loans. But tax refund loans are backed by the refund that you'll get from the IRS. Because of that, you don't need good credit or any credit to qualify for the loan.
The amount of APTC you'll have to repay will depend on how much excess APTC was paid on your behalf, your household income, and your tax filing status. If your household income (MAGI) is at least 400% of the previous year's federal poverty level (FPL), you'll have to repay all of the excess APTC.
What happens when you get a tax advance?
Taxpayers who take out RALs receive cash, typically right away, in the amount of their anticipated refund, minus fees. In exchange, they agree to pay an interest rate that could, when expressed as an annual percentage rate (APR), add up to a triple-digit rate.
To be eligible for most tax refund loans, 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 may have a minimum refund amount requirement to qualify, and you may get only a portion of your expected refund in advance.
The amount of the loan and any interest is deducted from a tax refund reducing the amount paid to a client. No Fee Refund Advance Loans are offered at no cost to you. Loan amounts are between $250 – $6,500. The loan amount is deducted from your tax refund reducing the amount paid to you.
If you are approved, your Refund Advance funds are typically available within 4 minutes of the IRS accepting your e-filed tax return. The IRS generally starts accepting returns in late January. Once approved, you'll receive an email when your Refund Advance funds are available to spend.
They borrow against their stock. This revolving door of credit allows them to buy what they want without incurring a capital gains tax.
A tax refund loan works like a payday advance, except you use your tax refund as collateral instead of using your paycheck as collateral. When you're ready to file your return, your preparer sets up a temporary bank account for the IRS to deposit your refund into.
You can apply for up to $4,000 based on the size of your federal refund with a Refund Advance loan. Refund Advance has $0 loan fees, 0% APR, and no impact to your credit score. If approved, you'll typically receive your Refund Advance within 4 minutes of the IRS accepting your e-filed return.
May Receive Less Money Than Anticipated
Since a tax refund advance loan is based on how much you think you'll get back in a refund, you may receive less money than you anticipate. If you owe federal or state debt or child support, for example, your loan amount will be reduced.
Fact – While not everyone is approved, the Refund Advance loan program at H&R Block has high approval rates. To be approved, you must apply and meet certain eligibility requirements, (such as ID verification and a sufficient expected tax refund amount), as well as meet the lender's underwriting requirements.
To apply for a Refund Advance, you must file your taxes using H&R Block and pass the lender's eligibility criteria (including a sufficient expected tax refund from the IRS, e-filing your return in a participating H&R Block office and providing certain consents and valid ID).
Can you get a personal loan with a credit score of 550?
Personal loans: Personal loans are unsecured loans that can be used for various purposes, such as debt consolidation, home improvement or unexpected expenses. While getting a personal loan with a 550 credit score is possible, you will likely face higher interest rates compared to borrowers with stronger credit.
*The Refund Advance is an optional tax-refund related loan provided by MetaBank (it is not the actual tax refund) at participating locations. The amount of the loan and applicable interest will be deducted from tax refunds and reduce the amount that is paid directly to the taxpayer.
Child tax credit 2024 (taxes filed in 2025)
For the 2024 tax year (tax returns filed in 2025), the child tax credit will be worth $2,000 per qualifying child, with $1,700 being potentially refundable through the additional child tax credit.
Al Capone is likely the most notorious tax evader in history. Although well-known as the king of Chicago gangsters, the federal government couldn't put together any criminal charges that would stick until they nailed Capone for failing to pay taxes.
The advance is based only on certain types of income---it is not based on EIC, child tax credit, etc. So even if you are getting a big refund, the advance may not be based on that big amount. Here are some of the eligibility requirements to qualify for a Refund Advance loan: You're 18 or older.
