Tax preparation firms and banks are the main sources of refund advance loans

Refund advance loans come from two types of lenders: tax preparation companies and banks. Tax preparation firms—including H&R Block, Jackson Hewitt, Liberty Tax, and smaller local preparers—offer them as part of their filing service. Banks including some regional and online lenders also offer refund advances, though usually only to existing customers or those who meet specific credit requirements. The lender gives you cash now against your expected tax refund, then takes repayment directly from your refund when it arrives at the IRS.

Not all tax preparers offer refund advances, and not all banks do either. Availability depends on the company's business model, your location, and sometimes your account history with them. Some preparers stopped offering them during the pandemic and have not resumed. If you are looking for a refund advance, you need to contact the specific company to find out whether they currently offer it.

Key Takeaways

  • Tax preparation chains like H&R Block and Jackson Hewitt offer refund advances as part of their filing service, though terms and fees vary by location and company.
  • Banks that offer refund advances typically require you to be an existing customer or to meet credit and income thresholds they set independently.
  • Credit unions sometimes offer refund advances to members, often at lower rates than tax preparation companies charge.
  • Online lenders and fintech companies have entered the refund advance market but often charge higher fees and interest rates than traditional banks.
  • The IRS does not offer refund advances directly; all refund advance loans come from private lenders.

Tax preparation companies and their refund advance terms

H&R Block offers a product called the Refund Advance at many of its locations. The amount you can borrow ranges from $250 to $6,000, depending on your expected refund and the location. H&R Block charges a fee for the advance—typically between $0 and $89—and the amount varies by state and whether you use a tax professional or their software. The loan is repaid automatically when your refund is processed.

Jackson Hewitt offers Refund Advance Loans through partner lenders at participating locations. The maximum advance is usually $6,000, and fees range based on the amount borrowed and your state. Jackson Hewitt locations are franchised, so terms can differ between individual offices. You should contact your local Jackson Hewitt office to learn their current terms.

Liberty Tax and other regional or independent tax preparation firms may offer refund advances, but the terms, maximum amounts, and fees are set by each business. Some small preparers have stopped offering them because of the regulatory burden or low demand. Call ahead or ask when you schedule your appointment.

Banks and credit unions offering refund advances

Some banks offer refund advances to customers, but the practice is less common than it was ten years ago. Chime, an online banking platform, has offered a refund advance product to account holders, though availability and terms change. LendingClub and other online lenders have marketed refund advances, though they typically charge higher interest rates than banks do. Regional banks and credit unions may offer refund advances to members, but you need to contact them directly to find out.

Credit unions often charge lower fees than tax preparation companies for refund advances. If you are a member of a credit union, ask whether they offer a refund advance or a short-term loan tied to your expected refund. Some credit unions will lend against a refund without calling it an "advance" but will structure the repayment to align with your refund arrival.

Banks typically require you to have an account with them for a minimum period—often 60 to 90 days—before you can borrow against a refund. They may also run a credit check or require a minimum account balance. Online banks have fewer physical locations, so you would need to complete the application and loan agreement online or by phone.

Fintech and online lender options

Fintech companies and online lenders have created refund advance products in recent years. These lenders often market themselves as faster or easier than traditional tax preparers, and some allow you to apply online without filing your taxes through them. However, they typically charge higher fees and interest rates than banks or tax preparation companies do.

Online lenders may charge origination fees, interest rates, or both. Some structure the cost as a flat fee (for example, $50 to $150 for a $1,000 advance), while others charge interest that accrues daily or weekly. Read the loan agreement carefully to understand the total cost before you accept the loan. The IRS does not regulate these lenders the way it regulates tax preparation companies, so terms can vary widely.

How to learn about a specific company offers refund advances

The fastest way to find out whether a company offers refund advances is to contact them directly. For tax preparation chains, call the location where you plan to file or visit their website and search for "refund advance." Most major chains have a page describing the product and its terms. For banks, call your branch or log into your online account and look for loan or advance products. For credit unions, ask a member services representative.

If you are shopping around, compare the total cost of the advance across lenders. A $1,000 advance with a $50 fee costs you $50. A $1,000 advance with a 36% annual interest rate charged for two weeks costs roughly $13.85. Write down the fee or interest rate, the maximum amount each lender will advance, and how long the loan takes to fund. This information will help you decide which lender makes sense for your situation.

Why some companies no longer offer refund advances

Several major tax preparation companies reduced or eliminated their refund advance products in recent years. The reasons include regulatory scrutiny, lower demand, and the cost of managing the loans. Some companies found that the fees they could charge did not justify the operational complexity of underwriting and servicing the loans.

The Consumer Financial Protection Bureau (CFPB) has examined refund advance lending practices and raised concerns about high fees and unclear terms. This scrutiny has made some lenders more cautious about offering the product. If a company you used in the past no longer offers refund advances, this is likely why.

What to watch for when comparing refund advance lenders

When you are comparing offers, look at the total cost, not just the fee. A lender that charges $100 for a $1,000 advance is charging 10% of the loan amount. A lender that charges 36% annual interest on the same $1,000 for two weeks is charging roughly $13.85. The second is cheaper, but only if the loan is repaid in two weeks. If it takes longer, the interest cost rises.

Also check whether the lender will fund the advance before you file your taxes or only after. Some tax preparation companies will give you the advance the same day you file. Others require you to wait for the IRS to accept your return first. This timing matters if you need the money urgently.

Finally, confirm that the lender will repay itself from your refund automatically. If the lender requires you to repay the loan separately—for example, by check or bank transfer—you are responsible for making sure the payment is made. If your refund is delayed or smaller than expected, you could end up owing the lender money out of pocket.

Frequently Asked Questions

Can I get a refund advance from the IRS directly?

No. The IRS does not offer refund advances. All refund advance loans come from private lenders—tax preparation companies, banks, credit unions, or online lenders. The IRS will repay the lender when your refund is processed, but you borrow from the private company, not from the government.

Do I have to file my taxes with the same company that gives me the refund advance?

Usually yes, but not always. Most tax preparation companies that offer refund advances require you to file through them. Some online lenders will give you a refund advance even if you file your taxes yourself or use a different preparer, but they charge higher fees. Check with the lender about their requirements.

What happens if my refund is smaller than the advance I borrowed?

The lender will take what they can from your refund and you will owe them the difference. For example, if you borrowed $2,000 and your refund is only $1,500, the lender takes the $1,500 and you owe them $500 plus any remaining fees or interest. This is why it is important to estimate your refund carefully before you borrow.

Can I get a refund advance if I have bad credit?

Tax preparation companies typically do not run a hard credit check for refund advances, so bad credit usually does not disqualify you. Banks and online lenders are more likely to check your credit and may deny you if your score is low. Credit unions often have more flexible credit requirements than banks do.

How long does it take to get the money from a refund advance?

Tax preparation companies often fund refund advances the same day you file your taxes, sometimes within hours. Banks and online lenders may take one to three business days to fund the loan. Ask the lender about their funding timeline before you commit to the loan.