Yes, you can borrow against your expected refund, but it costs money and moves faster than waiting
Several financial products let you borrow money now and repay it when your refund arrives. The most common are refund anticipation loans (offered by some tax preparation companies), refund advances (offered by some banks and credit unions), and personal loans from lenders who don't tie the loan to your refund at all. Each one works differently, costs different amounts, and takes a different amount of time to fund.
The key thing to understand first: you are borrowing money you expect to receive, not receiving the money early. You will owe the loan back whether your refund arrives, is smaller than expected, or is delayed. The IRS does not may provide refund timing, so lenders protect themselves by charging fees and interest.
Key Takeaways
- Refund anticipation loans and refund advances charge fees (typically $50 to $300) to lend you money before the IRS processes your return.
- A personal loan from a bank, credit union, or online lender does not tie the loan to your refund and may have lower interest rates if you have decent credit.
- Refund advances from your own bank or credit union are usually cheaper than tax-company loans because they already know your account history.
- The IRS typically processes refunds within 21 days of accepting your return, so waiting costs nothing but requires you to manage without the money for that time.
- If you file electronically and choose direct deposit, your refund usually arrives faster than if you file on paper or request a check.
How refund anticipation loans work
A refund anticipation loan is a short-term loan offered by tax preparation companies (like H&R Block or Jackson Hewitt) or tax software providers. You file your return with them, and they lend you a portion of your expected refund when ready—usually the same day or within 24 hours. When the IRS sends your actual refund, it goes to the lender first, and they take back the loan amount plus fees.
These loans typically charge between $50 and $300 in fees, depending on the loan size and the company. Some also charge interest on top of the fee. Because the loan is small and short-term (usually 1 to 3 weeks), the interest rate looks low in percentage terms, but the actual cost per dollar borrowed is high. For example, a $300 fee on a $2,000 loan for two weeks works out to an annual interest rate of roughly 39 percent, even though the fee itself sounds small.
The catch: if your refund is smaller than expected, delayed, or rejected by the IRS, you still owe the full loan amount. The lender does not wait for the IRS to send money—you owe them on the date you agreed to, regardless of what happens with your return.
Refund advances from your bank or credit union
Some banks and credit unions offer refund advances to their own customers. These work similarly to tax-company loans, but the lender already has your account information and banking history, so they can often approve you faster and charge less. Credit unions in particular tend to offer these at lower fees than tax preparation companies.
To get a refund advance from your bank or credit union, you typically need to be an existing customer with an account in good standing. You will need to show them your tax return (or a copy of it) so they can see your expected refund amount. Some banks process these same-day; others take a few business days. Fees usually range from $25 to $150, which is lower than tax-company loans.
Call your bank or credit union directly and ask if they offer refund advances. Many do not advertise them heavily, so you may need to ask a teller or loan officer specifically. If they do offer them, ask about the fee, how long approval takes, and whether the loan is tied to direct deposit or if they will accept a check from the IRS.
Personal loans as an alternative
A personal loan from a bank, credit union, or online lender does not tie the loan to your refund. You borrow a fixed amount, make fixed monthly payments, and the loan has nothing to do with the IRS. This means you are not betting on your refund arriving on time or being the amount you expect.
Personal loans typically have lower interest rates than refund anticipation loans if you have decent credit (usually a credit score of 650 or higher). If your credit is lower, the interest rate will be higher, but you still might come out ahead because you are borrowing for a longer period and spreading the cost across multiple payments rather than paying a large upfront fee.
The downside: you have to repay the loan whether or not your refund arrives. If you are counting on the refund to repay the loan, a personal loan adds risk. But if you need the money now and can manage the payments from other income, a personal loan gives you more flexibility and usually costs less overall.
What happens if your refund is delayed or smaller than expected
The IRS aims to process refunds within 21 days of accepting your return if you file electronically and choose direct deposit. However, delays happen. The IRS may need to verify information on your return, you may have made an error that requires correction, or the IRS may be processing a high volume of returns. During tax season (January through April), delays of several weeks are common.
If you took out a refund anticipation loan and your refund is delayed, you still owe the loan on the date it is due. You cannot tell the lender "the IRS is slow, so I need more time." You will have to pay the loan from other money or face late fees and credit damage.
If your refund is smaller than expected—because you made an error, claimed something incorrectly, or owe back taxes or child support—you still owe the full loan amount. The IRS will send whatever refund you are due to the lender, but if it is less than the loan, you will have to pay the difference yourself.
Comparing the cost of each option
| Option | Typical Cost | Speed | Risk if Refund is Late or Small |
|---|---|---|---|
| Refund anticipation loan (tax company) | $50–$300 fee, sometimes plus interest | Same day to 24 hours | You owe the full loan amount regardless |
| Refund advance (bank or credit union) | $25–$150 fee | Same day to a few business days | You owe the full loan amount regardless |
| Personal loan | Interest rate varies (5% to 36% APR depending on credit); paid over months | 1 to 5 business days | You owe the full loan amount regardless, but payments are spread out |
| Wait for refund (no loan) | $0 | Up to 21 days (or longer if delayed) | No risk; you receive what you are owed |
How to file your return to get your refund as fast as possible
If you decide to wait rather than borrow, you can speed up your refund by filing electronically and choosing direct deposit. The IRS processes e-filed returns faster than paper returns, and direct deposit is faster than mailing a check. If you file on paper or request a check, add 1 to 2 weeks to the timeline.
File as early as possible in the tax season (starting in late January or early February). The IRS processes returns in the order they receive them, so filing early means your return is processed before the peak volume hits in March and April. If you file in April, expect longer delays straightforward because the IRS is handling millions of returns at once.
Make sure your return is correct before you file. Errors trigger IRS reviews, which delay your refund by weeks or months. Double-check your Social Security number, your income figures, and any credits or deductions you are claiming. If you are unsure, use the IRS Free File program (available at IRS.gov if your income is below a certain threshold) or pay a tax preparer to review your return before filing.
Frequently Asked Questions
Can I get a refund advance if I have bad credit?
Refund advances from banks and credit unions usually require an account in good standing, but they do not typically pull your credit score. Tax-company refund anticipation loans may not require a credit check either, but they charge higher fees. Personal loans from online lenders may work with lower credit scores, but the interest rate will be higher.
What if I file my taxes late—can I still get a refund advance?
Yes, but the timeline is tighter. If you file in April or May, the IRS may take longer to process your return, which means the lender has less time to get repaid before your refund arrives. Some lenders will not offer advances this late in the season. Call your bank or credit union as soon as you file to ask if they can still help.
Do I have to use the tax company's refund loan, or can I go to my bank instead?
You can go to your bank or credit union instead. You do not have to use the loan offered by the tax preparation company. In fact, your bank's refund advance is usually cheaper. You can file your taxes with one company and borrow from a different lender.
What if I do not have a bank account?
If you do not have a bank account, a refund anticipation loan from a tax preparation company is your main option, because they can issue you a prepaid card or check. Some credit unions offer accounts to people without traditional banking history. You can also open a basic checking account at most banks with just an ID and a small deposit, which would then let you get a refund advance.
Is it ever worth borrowing against my refund?
It depends on your situation. If you need money urgently and cannot wait 21 days, borrowing costs money but solves an when ready problem. If you can manage without the money for a few weeks, waiting costs nothing. If you are already behind on bills or rent, a personal loan from a credit union might be cheaper and safer than a refund anticipation loan.