- 1 Tax Refund Cash Advance Emergency Loans
- 2 What Is the Cost of a Tax Refund Loan?
- 3 Alternative loans to tax refunds
- 4 Why Should I Obtain A Tax Refund Advance?
- 5 Where can I get a tax refund loan?
- 6 Eligibility Requirements For Online Emergency Loans With Tax Refunds
- 7 How is the amount of my Refund Advance determined?
- 8 How is the remainder of my refund handled once I receive my refund advance?
Tax Refund Cash Advance Emergency Loans
A loan based on your impending tax refund is known as a tax refund loan. The amount of money you can receive will depend on your projected tax refund size and the lender you choose. However, most tax refund loans fall between $200 and $3,500.
Remember that while you wait for the government to process your tax refund, a tax refund advance loan is a short-term financing alternative that usually lasts a few weeks.
Banks that collaborate with tax preparation firms typically offer loans against tax refunds.
You’ll probably obtain your money by direct deposit or a prepaid card if you apply for and are authorized for a tax refund advance.
Your return will be transferred to the lender once it has been processed by the government, which should take a few weeks. Your loan balance, fees, and any residual cash will be automatically deducted by the lender and returned to you.
What Is the Cost of a Tax Refund Loan?
The main deterrent of tax return loans is their high cost. In some cases, they resemble payday loans uncannily; both are small, short-term loans with hefty interest rates. Be aware that you will probably pay less if you obtain a loan from a reputable tax filing service than if you use a third-party lender.
Typically, lenders demand an application fee that might reach $100. You will be responsible for paying the filing fee (likely around $40) if they assist you with submitting your taxes. Depending on how you get your loan, there may be additional fees. For instance, there can be a $30 fee for getting your loan on a prepaid debit card vs. a $20 fee for getting it on a check. Lenders may also impose other modest fees. You will also have to pay interest on the loan on top of the costs. Your interest rate will be in the double digits, with triple digits occasionally possible.
You should budget at least 10% of your refund for a two-week loan. Of course, if there are any problems or your refund is delayed, you might have to pay more. Remember that tax return loan deadlines are frequently early. So, the amount of money you anticipate receiving from the IRS as a refund could be affected by child support, past taxes, student loans, and other circumstances.
Alternative loans to tax refunds
You might borrow the same amount for less money elsewhere, pay it off with your tax return, and obtain a lower rate.
Some internet lenders provide $1,000 small personal loans with funding the next day after approval. Rates range from 6% to 36%, and requirements differ according to the lender. Borrowers with good or exceptional credit (a FICO score of 690 or higher), high incomes, and minimal existing debt are eligible for the lowest rates.
Payday loan alternatives.
Depending on the type of loan, several credit unions give their members access to payday alternative loans ranging in amount from $200 to $2,000. The maximum annual percentage rate (APR) for these loans is 28 percent, and the application cost is $20.
They offer you a low- or no-cost paycheck advance. The maximum loan amount is often $250, and the app will take the money out of your account on your following payday. Loan apps might, however, charge a subscription fee to receive funds more quickly or request an optional gratuity. These apps may be useful if you require money right away, but they aren’t a long-term fix.
Why Should I Obtain A Tax Refund Advance?
Getting a tax refund advance is beneficial for numerous reasons. It’s a safe loan kind that can help you receive your tax refund money sooner, and the procedure goes hand in hand with filing and taking care of your taxes as well.
Receive Your Refund Quicker
If you typically get your tax refund in the mail, you might be able to access your funds sooner than if you waited for the check to show up in the mailbox. Your refund advance can be available 24 hours after filing if you set up an electronic payment.
You may be able to file your taxes and receive your tax return in one easy process by obtaining a tax refund advance.
This loan is secure
A tax return loan is typically less than the tax return you anticipate receiving. That indicates that you will repay the complete loan after processing your tax return. Even when your loan is paid off, there’s a chance you’ll still get some money from your return.
Because the loan repayment is previously planned, tax return advances are a safe borrowing alternative.
Where can I get a tax refund loan?
Several tax preparation firms provide tax refund loans. These are a few well-known businesses that provide this kind of loan:
Beginning in December, Jackson Hewitt offers both early refund loans and fee-free refund loans.
The maximum loan amount and APR for its early refund loans are both $1,000. If you can wait until January, you might be able to get one of its standard tax return loans, which have a 0% APR and a $3,500 maximum.
Based on your anticipated refund, Intuit TurboTax offers tax refund advances in the following ranges: $250, $500, $750, $1,000, $1,500, $2,000, $2,500, $3,000, $3,500, and $4,000.
If accepted, they will issue the loan to you right away on a Turbo Visa Debit Card.
Similar to the tax refund loan offered by H&R Block, TurboTax only offers refund advances during specific months.
You might be eligible for an H&R Block tax refund loan of up to $3,500 if you apply in January or February. Depending on how much of a tax refund you’ll receive, you can choose between $250, $500, $750, $1,250, or $3,500 for these loans, which MetaBank sponsors. You might be able to use H&R Block’s Emerald Prepaid Mastercard to access your funds the same day you file for this 0% APR loan.
Eligibility Requirements For Online Emergency Loans With Tax Refunds
Each lender is independent and may have different requirements for borrowers seeking online emergency loans to get their tax refunds.
Typically, Payday Loans’ lenders will demand that:
- You possess a valid identity and a social security number.
- You expect a tax refund from the IRS
- You are at least 18 years old
How is the amount of my Refund Advance determined?
Your authorized amount is determined, among other things, by the size of your federal refund (minus any Recovery Rebate Credit) and your tax information. If one of these reasons doesn’t satisfy the lender’s qualification requirements, you could not be eligible for the maximum Refund Advance amount.
How is the remainder of my refund handled once I receive my refund advance?
Your remaining return amount (less the Refund Advance amount from your federal refund and any additional TurboTax costs) will be transferred into your checking account when the IRS or state tax authorities distribute your refund.
Aubrey Saffa Bender has been a freelance journalist and journalist since 2013. She writes about topics that range from personal finances and education to technology and business. In her work for PaydayChampion, Aubrey primarily draws from her writing experiences regarding mortgages, home purchases, and real estate. She graduated with a B.A. with a major in English at The University of Colorado Boulder.