Banks, tax prep companies, and fintech lenders offer refund advances, but the terms and costs vary widely
A refund advance — also called a refund anticipation loan or RAL — comes from a private lender, not the IRS. The lender gives you money based on your expected tax refund, then collects repayment directly from the IRS when your refund arrives. Banks, tax preparation chains, and online fintech companies all offer these products, but they charge different fees and have different speed and approval processes.
The lender does not wait for the IRS to process your return. Instead, you file your tax return with the lender's help, and they fund the advance within one to three business days if you meet their requirements. The IRS then sends your actual refund to the lender to cover the loan amount, and any remainder goes to you.
These advances are not free. Fees typically range from $50 to $300 depending on the lender, the loan size, and whether you use additional services like tax preparation or electronic filing. Some lenders charge a flat fee; others charge a percentage of the loan amount or combine both.
Key Takeaways
- Banks, tax prep chains like H&R Block and Jackson Hewitt, and online lenders like MoneyLion and Earnin all offer refund advances with different fee structures.
- Funding typically arrives within one to three business days if you file electronically and meet the lender's income and refund size requirements.
- Fees range from $50 to $300 and may include tax preparation costs, filing fees, and loan origination charges stacked together.
- The IRS sends your actual refund directly to the lender to repay the advance, so you do not receive a separate check from the government.
- If your refund is smaller than the advance amount, you are responsible for the difference — the lender does not absorb the loss.
Tax Preparation Chains and Their Refund Advance Products
H&R Block, Jackson Hewitt, Liberty Tax, and JTX (formerly JT Maxx Tax) all offer refund advances as part of their tax preparation services. These companies prepare your return in-office or online, file it electronically, and then offer the advance on the same day or within 24 hours. They bundle the advance fee with their tax preparation fee, so your total cost includes both services.
H&R Block's advance product is called the Refund Advance Loan. Jackson Hewitt offers the Rapid Refund. Liberty Tax has the Liberty Tax Refund Advance. Costs vary by location and service level — a basic advance at a chain location might cost $150 to $250 total when combined with tax prep, while online versions may be cheaper. These chains have physical locations in most states, so you can walk in during tax season and leave with an advance the same day if you have your documents ready.
The trade-off is that you pay for tax preparation whether you need it or not. If you have a simple return and only want the advance, a chain location may not be the cheapest route.
Banks and Credit Unions Offering Advances
Some banks and credit unions offer refund advances to their account holders. Chime, LendingClub, and certain regional banks have offered these products in past tax seasons, though availability changes year to year. If you have a checking account with a bank, call your branch or check their website during tax season to ask whether they offer advances and what the requirements are.
Bank-based advances often have lower fees than tax prep chains — sometimes $0 to $100 — because the bank already has your account information and can verify your income and refund size more quickly. However, not all banks offer them, and those that do may limit the advance to account holders who meet minimum balance or direct deposit requirements.
Credit unions sometimes offer advances to members at lower rates than commercial banks. Contact your credit union directly to ask whether they participate in the program and what documentation you need to provide.
Online Lenders and Fintech Companies
MoneyLion, Earnin, Brigit, and Dave are fintech apps that offer refund advances alongside other short-term lending products. These companies operate entirely online and fund advances within one to three business days after you upload your tax documents. Fees are typically $0 to $15 for the advance itself, though some charge a membership fee ($10 to $20 per month) to use their platform.
The advantage of fintech lenders is speed and low upfront cost. You do not have to visit a location or pay for tax preparation. The disadvantage is that these companies do not prepare your tax return — you must file it yourself through the IRS Free File program, a tax software company, or a tax professional. If you need help preparing your return, you will pay separately for that service.
Fintech lenders also tend to have stricter requirements. They may require a minimum refund size (often $300 to $500), a valid bank account, and proof of income. Some will not lend to you if your refund is expected to be very large or if you have recent credit issues.
Comparing Costs Across Lender Types
| Lender Type | Typical Fee Range | Funding Speed | Tax Prep Included |
|---|---|---|---|
| Tax Prep Chain (H&R Block, Jackson Hewitt) | $150–$300 (includes tax prep) | Same day to 24 hours | Yes |
| Bank or Credit Union | $0–$100 | 1–3 business days | No |
| Online Fintech Lender | $0–$15 (plus optional membership) | 1–3 business days | No |
The lowest-cost option is usually a fintech lender if you can file your own return or use free tax software. The fastest option is a tax prep chain location if you have all documents ready. The best option for you depends on whether you need tax preparation help, how quickly you need the money, and how much you can afford to pay in fees.
What You Need to Provide to Get an Advance
All lenders require the same basic information: your Social Security number, proof of income (recent pay stubs or 1099 forms), a valid government-issued ID, and a bank account in your name for the lender to deposit the advance and receive repayment from the IRS. Some lenders also ask for your prior year's tax return to verify your refund history.
If you are filing through a tax prep chain, you will also need documents to prepare your return: W-2s, 1099s, receipts for deductions if you itemize, and any other income or expense records relevant to your situation. Fintech lenders and banks do not prepare your return, so you provide only the documents needed to verify your identity and income.
The lender will estimate your refund size based on your income and filing status. If your actual refund is smaller than the advance, you owe the difference. If it is larger, you receive the remainder after the lender is repaid. The IRS sends the refund directly to the lender's account, not to you, so you never handle the money yourself.
How the Repayment Process Works
When you receive a refund advance, you sign a document authorizing the lender to collect repayment from your IRS refund. This is called a power of attorney or tax refund assignment. You file your return electronically with the lender's tax ID number included, so the IRS knows to send the refund to the lender instead of to you.
The IRS typically processes refunds within 21 days of filing, though it can take longer if there are errors or if the IRS needs to verify information. Once the refund arrives at the lender's account, they deduct the advance amount plus any fees, and deposit the remainder (if any) into your bank account within one to three business days.
If the IRS delays your refund or reduces it due to an error on your return, the lender still expects repayment. If your refund is smaller than the advance, you are responsible for paying the shortfall. Some lenders allow you to set up a payment plan; others require immediate repayment. Read the loan agreement carefully to understand what happens if your refund does not cover the full advance amount.
Risks and Drawbacks of Refund Advances
The main risk is that you are borrowing against money that is not yet in your hands. If the IRS reduces your refund due to an error, a prior debt, or a wage garnishment, you still owe the lender the full advance amount. If you cannot repay, the lender may pursue collection or report the debt to credit bureaus.
Refund advances also delay your actual refund. Instead of receiving your full refund from the IRS, you receive only what remains after the lender is repaid. If you need the full refund amount, an advance works against you by taking a cut upfront.
The fees, while seemingly small, add up quickly. A $300 advance with a $100 fee is effectively a 33% annual interest rate if you hold the loan for just one month. If you can wait three weeks for your refund without borrowing, you save the fee entirely.
Frequently Asked Questions
Can I get a refund advance if I have bad credit?
Yes. Most lenders do not run a hard credit check for refund advances because the loan is secured by your IRS refund. Tax prep chains and banks typically do not check credit at all. Fintech lenders may review your credit history but often approve applicants with fair or poor credit if your refund is large enough to cover the advance.
What happens if my refund is smaller than the advance?
You are responsible for the shortfall. The lender will contact you to arrange repayment, which may be immediate or on a payment plan depending on the lender's policy. Read your loan agreement to understand the repayment terms before you sign.
How long does it take to get the money?
Tax prep chains typically fund advances the same day or within 24 hours if you file in person with all documents ready. Banks and fintech lenders usually fund within one to three business days after you submit your documents and they verify your information.
Do I have to use a tax prep chain to get an advance?
No. Banks, credit unions, and online fintech lenders all offer advances without requiring you to use their tax preparation services. If you file your own return or use free tax software, you can get an advance from a bank or fintech lender and avoid paying for tax prep.
Can the IRS refuse to send my refund to the lender?
No. Once you file your return with the lender's tax ID number and sign the power of attorney, the IRS will send your refund to the lender's account as instructed. The lender then repays themselves and sends you the remainder.