What Is a Tax Refund Advance, and What’s the Soonest You Can Get One?

If you’re eligible for a tax refund, you may be able to get a portion of what you’re owed early in the form of an advance. A tax refund advance is typically only available when you file your return early, often in January or February, but sometimes you can get one as early as November. 

If you need to consider alternatives, we recommend starting with cash advance apps or personal loans. Here’s what you need to know about tax refund advance loans and how to get one. 

Table of Contents

1. What is a tax refund advance?
2. How it works
   1. How to apply
   2. Eligibility
   3. Loan amount
   4. Loan terms
   5. Funding
3. Can I get an advance on my tax refund now?
4. Alternatives
   1. Cash advance apps
   2. Personal loans
5. FAQ

What is a tax refund advance?

A tax refund advance is a short-term loan that allows you to access part of your expected tax refund before the IRS issues it. Typically offered by tax preparation companies, these advances give you early access to your refund. Depending on when you request the advance, you might owe interest as high as 36% APR. The amount is based on your estimated refund and is usually available once you file your tax return and the IRS accepts it.

With a tax refund advance, you can cover immediate expenses without waiting weeks for your refund to process. Once the IRS releases your refund, the loan amount is repaid through direct deposit into a designated account the tax preparer sets up. 

While convenient, it’s important to compare terms and fees before choosing a tax refund advance to ensure it’s the right option for your financial situation.

How does a tax refund advance work?

Tax refund advance terms can vary depending on which tax preparation service you use. Here are general guidelines.

How to apply

When filing your tax return, you can typically request an advance as you choose your refund method. 

If you want an advance before filing your return, you can apply online at the tax prep company’s website or make an appointment with a local office, where you can submit an application.

Eligibility

Because these advances come from tax prep companies, you’ll need to e-file your return with the company to be eligible, and you may pay a fee to file. 

If you have a tax liability (meaning you owe money to the IRS), you won’t be eligible for a tax refund advance loan.

No hard credit check is involved in most cases, and you may qualify even if you have less-than-stellar credit. 

Loan amount

Depending on the company, you may be able to get up to $6,500 of your refund in advance. The amount you qualify for will depend on your refund amount. With TurboTax, for instance, you’re limited to 50% of your anticipated federal refund.

Loan terms

In most cases, tax refund advance loans available when you file your return in January and February don’t charge interest or fees. If you want an advance before then, some tax preparation companies charge an annual percentage rate (APR) close to 36%.

The repayment process will also vary by company. In some cases, you’ll have a deadline by which you need to repay what you owe. In others, it may be repaid automatically when the IRS processes your refund.  

Funding

You typically won’t get the refund advance deposited into your bank account. Instead, you may receive a prepaid debit card or a new checking account with the tax prep company. Funding is often instant upon approval, but it can take up to 48 hours in some cases.

Can I get an advance on my tax refund now?

Maybe. In most cases, when you file your tax return electronically, the IRS will issue your refund within 21 days. With a tax refund advance loan, you could get a portion of your expected refund when your tax return is accepted, or even earlier.

The timing to apply for an advance will depend on the type of loan you want:

• Standard advance: You can only apply for a standard tax refund advance when you file your return electronically and the IRS accepts your return. Most tax prep companies start accepting returns in January. But while the federal tax deadline isn’t until mid-April, many companies only offer advances through the end of February.
• Early advance: Some tax prep services offer early advances you can get before you’re eligible to file a return. Depending on the company, applications may open in November or December and go through the end of the year or mid-January.  

Remember: Early advances may come with a steep interest rate (up to 36% APR) so consider this option only if you urgently need funds and don’t have access to more affordable alternatives. 

In my professional experience, the most common risk of using a tax refund advance loan is a delay in the actual refund from the IRS. This resulted in additional fees because the borrower couldn’t meet the loan terms. I advise clients to make sure they understand the terms, read the fine print, and, most importantly, ensure that the tax return is accurate to avoid any delays.

Erin Kinkade, CFP®

Alternatives to a tax refund advance if you can’t get one now

If you need cash now but it’s too early for a tax refund advance, you don’t qualify, or you want a more affordable option, it’s important to consider other ways you can get the money you need.

Several options may be available, but cash advance apps and personal loans are often best if you need fast funds. Here’s what you need to know about how they work and when to consider them.

If a client needs fast cash and is considering a tax refund advance, a cash advance app, or a personal loan, we start by discussing the purpose of the loan. We determine whether it’s a need or want and the amount they need. (If it’s a want, we establish a savings plan.) 

To determine which type of loan to take, we look at reputable companies only, their interest rates and overall terms, along with the amount they can borrow. For example, if cash advance apps don’t provide the amount they need, we look at alternatives or choose the tax refund advance.

Erin Kinkade, CFP®

Cash advance apps

Cash advance apps offer small, short-term loans with quick funding, often without a hard credit check. Here’s a quick summary of common cash advance app terms

• Loan amounts: Depending on the app, you may be able to get anywhere from $20 to $1,500, though higher amounts may only be available to repeat customers.
• Repayment terms: You’ll typically repay the loan within a few weeks, often by your next payday. 
• Costs: Cash advance apps typically don’t charge interest, and many don’t charge mandatory fees. However, some may charge a monthly membership fee, and others might assess a fee if you want to access your cash sooner. 
• Funding: Funds are often sent directly to your bank account. However, funding timelines can vary by app. In some cases, it may take a few days to get your money unless you pay a fee to expedite the process.
• Eligibility: Some cash advance apps may run a soft credit check when you apply, but most don’t have minimum credit score requirements. 

A cash advance app is worth considering if you need a small amount. While you may not owe interest, short repayment terms and potential fees could result in sky-high APRs. 

If you’re considering a cash advance app, here are some of our highest-rated picks based on costs, funding timelines, and other benefits:

Personal loans

Applying for a personal loan may be a solid option if you have good credit and need more cash than you could get with a cash advance app or tax refund advance. Here are typical terms:

• Loan amounts: Depending on the lender, you might be able to borrow anywhere from $250 to $250,000.
• Repayment terms: Personal loan terms may range from one to 10 years, but some lenders offer more flexible options. 
• Costs: Personal loan interest rates vary by lender and your creditworthiness. But in general, APRs can range from around 6% to 36% among top lenders. Some lenders charge an upfront origination fee, which could be anywhere from 1% to 12% of your loan amount. 
• Funding: Funds are often sent right to your bank account within a few days. However, some lenders offer next-day or even same-day funding.
• Eligibility: There’s no universal minimum credit score requirement for a personal loan, and it’s possible to get approved, even if you have bad credit. However, you’ll likely need good or excellent credit to get approved for favorable terms. 

Before you apply for a personal loan, it’s important to shop around and compare your options. Here are some of the best personal loans based on interest rates, loan amounts, repayment terms, and eligibility requirements:

FAQ

Can you get a tax refund advance with bad credit?

Yes, it’s possible to get a tax refund advance with bad credit. Many tax refund advance providers don’t require a credit check and instead base approval on your anticipated tax refund. However, keep in mind that some providers may limit the amount you can borrow if your credit history is weak.

What disqualifies you from a refund advance?

Several factors can disqualify you from getting a tax refund advance, including having an outstanding tax debt, filing a complicated or incomplete return, or providing inaccurate information. Most providers require you to file your taxes through them, so filing elsewhere could also make you ineligible.

Can I get a loan on my tax refund now?

Yes, some tax preparers offer refund advance loans before your tax refund is issued. These loans provide a portion of your refund upfront, often starting as soon as the IRS accepts your return. Note that fees and terms vary by provider, so it’s wise to compare options.

How can I get my tax refund immediately?

To get your tax refund as soon as possible, file your return electronically, and select direct deposit. You won’t receive the refund immediately, but this method is the fastest, with most refunds issued within 21 days. Refund advance loans can help you access a portion of your refund sooner, but this may come with fees.

What is a hardship refund?

A hardship refund is issued ahead of time due to a financial hardship. You may be able to request an expedited refund if you’re facing immediate financial difficulties, such as eviction or a medical emergency. This is typically handled through the IRS Taxpayer Advocate Service, which may request proof of your hardship.