Tax refund anticipation loans come from tax preparation companies and some banks, not from the IRS
A tax refund anticipation loan (RAL) is a short-term loan that a tax preparer or bank offers you based on your expected tax refund. You get the money within days instead of waiting for the IRS to process your return—usually one to five business days. The lender then collects repayment directly from your refund when it arrives at the IRS.
The IRS itself does not offer these loans. Instead, tax preparation chains like H&R Block and Jackson Hewitt, some independent tax preparers, and a handful of banks partner with lenders to make them. The lender takes on the risk that your refund might be smaller than expected, that it might be delayed, or that the IRS might offset it against other debts you owe.
These loans are not the same as a refund advance or refund offset product, though the names are sometimes used interchangeably. The key difference is who holds the money: with a RAL, a third-party lender gives you cash upfront and waits for the IRS refund to repay themselves. With some other products, the tax preparer or fintech company advances the money but takes it back from your refund before it reaches your bank account.
Key Takeaways
- Tax refund anticipation loans are offered by tax preparation companies, independent tax preparers, and some banks—never by the IRS directly.
- The lender deposits money into your account within one to five business days, then recovers the loan amount from your IRS refund.
- Costs include loan fees (typically $50 to $300 depending on refund size), interest charges, and sometimes filing fees charged by the tax preparer.
- The IRS does not may provide your refund amount or timing, so if your refund is delayed or smaller than expected, you still owe the lender the full loan amount plus fees.
- You can get your refund without a loan by filing electronically and choosing direct deposit, which typically takes 21 days or less.
Which companies currently offer refund anticipation loans
H&R Block has offered RALs through partner banks in past years, though availability has shifted. Jackson Hewitt Tax Service has historically been a major RAL provider. Both companies change their product offerings year to year based on demand and regulatory environment, so you need to check their current website or call their local office to see whether they offer RALs in the current tax season.
Some independent tax preparers and smaller regional tax firms also offer RALs through partnerships with lenders. These are harder to identify without calling around, but you can ask any tax preparer you contact whether they offer a refund loan product.
A small number of banks and credit unions have offered RALs directly to their customers, though this has become less common. If you bank with a large institution, you can call their customer service line and ask whether they offer tax refund loans or advances.
Fintech companies and online tax software providers (like TurboTax or TaxAct) sometimes offer refund advance products, but these typically work differently than traditional RALs—they are often interest-free but charge a flat fee, and the company takes the advance back from your refund before you receive it.
What a refund anticipation loan actually costs
The total cost of a RAL includes three separate charges: the loan fee, interest, and sometimes a filing fee from the tax preparer. Loan fees typically range from $50 to $300 depending on the size of your expected refund. Interest is charged on top of that—rates vary but often fall between 36% and 155% annually, though you are only borrowing for a short time so the actual interest paid is usually $10 to $50.
The tax preparer may also charge a separate fee to file your return electronically, which can be $50 to $200 depending on the complexity of your return and the preparer's pricing. Some preparers bundle this into the RAL fee; others charge it separately.
To understand the real cost, ask the lender or tax preparer for the total amount you will owe when your refund arrives. They must disclose this in writing before you sign the loan agreement. If they cannot or will not give you a total, do not proceed.
How the repayment process works when your refund arrives
When you take out a RAL, you authorize the lender to intercept your IRS refund. You sign a form that directs the IRS to send your refund to the lender's account instead of your own bank account. The lender then deducts the loan amount, all fees, and interest from that refund and deposits what remains into your account.
This process typically takes place within one to two weeks after the IRS processes your return. The IRS does not prioritize RAL refunds, so your return still goes through the normal processing queue. If the IRS needs to verify information on your return or suspects fraud, processing can take longer—sometimes 60 days or more.
If your refund is smaller than the loan amount plus fees, you still owe the difference. The lender will contact you for payment. If your refund is offset by the IRS (for example, because you owe back taxes or student loans), the lender may not recover the full loan amount and will pursue you for the shortfall.
Why the IRS stopped promoting refund anticipation loans
The IRS and the Consumer Financial Protection Bureau have raised concerns about RALs for years. The main issue is that borrowers often do not understand the true cost or the risk. Many people take out a RAL to get money a few weeks faster, not realizing they are paying $100 to $200 in fees and interest for a short-term loan.
In 2010, the IRS stopped allowing tax preparers to advertise RALs as a free or low-cost service. The agency also began requiring clearer disclosure of fees and terms. However, RALs remain legal and available—the IRS straightforward no longer promotes them or makes them easier to obtain.
Consumer advocates point out that if you file your return electronically and choose direct deposit, the IRS will deposit your refund into your bank account within 21 days at no cost. For most people, waiting three weeks is far cheaper than paying $100 to $200 to get the money a few days sooner.
Alternatives to a refund anticipation loan
The simplest alternative is to file electronically and choose direct deposit. This is free and takes 21 days or less in most cases. If you need money before your refund arrives, consider a personal loan from a bank or credit union, a credit card cash advance, or a short-term loan from a payday lender—though payday loans carry their own high costs and risks.
Some tax preparers offer refund advance products that are interest-free but charge a flat fee ($20 to $50). These work by the preparer advancing you the money upfront and then taking it back from your refund when it arrives. The fee is lower than a RAL, but you are still paying to get money a few weeks faster.
If you are in a genuine financial emergency, contact your local 211 service or a nonprofit credit counselor to explore whether emergency information programs or low-interest loans are available in your area. These are often cheaper and more flexible than any tax refund product.
What happens if the IRS delays or reduces your refund
The IRS processes returns in the order they are received, and certain returns trigger additional verification steps. If your return is selected for review, processing can take 60 days or longer. During that time, you have already received the RAL and owe the lender the full amount plus fees—regardless of when your refund actually arrives.
If the IRS reduces your refund because you made an error on your return or because they found a discrepancy, you still owe the lender the full loan amount. The lender will pursue you for the shortfall. This is why the lender requires you to sign a promissory note: they are protecting themselves against this exact scenario.
If the IRS offsets your refund to pay back taxes, student loan debt, or child support arrears, the lender's claim comes first in most cases. However, the exact order depends on the type of debt and state law. Ask the lender in writing what happens if your refund is offset before you sign the loan agreement.
Frequently Asked Questions
Can I get a refund anticipation loan if I have bad credit?
Yes. RAL lenders do not typically run a credit check because they are secured by your IRS refund. The lender's risk is that your refund will be late or smaller than expected, not that you will default on an unsecured loan. However, some lenders may decline you if you have a history of IRS offsets or if your expected refund is very small.
How fast will I get the money from a refund anticipation loan?
Most lenders deposit the money into your bank account within one to five business days after you sign the loan agreement. Some advertise next-day funding, but this depends on your bank's processing speed and whether you sign the agreement early in the business day. The actual IRS refund processing takes longer—typically 21 days or more.
What if I file my taxes late in the season—can I still get a RAL?
Yes, but the timeline becomes tighter. If you file in April and the IRS processes your return in May, you may receive your refund before the RAL lender can even process the loan. Ask the lender whether they can still offer a RAL given your filing date. Some lenders stop offering RALs in late April or May because the risk of the refund arriving before the loan is funded becomes too high.
Do I have to use the tax preparer's RAL, or can I shop around?
You can shop around. If a tax preparer offers a RAL, you can ask them for the total cost in writing, then contact other preparers or lenders to compare. However, once you choose a lender, you typically must file your return through that preparer or lender because they need to control the refund routing to their account.
What if my refund is offset and I cannot repay the RAL lender?
Contact the lender when ready and explain the situation. Some lenders will work out a payment plan. If you cannot reach an agreement, the lender may pursue collection action, which could result in wage garnishment or a judgment against you. This is why it is critical to understand the risk before signing: if your refund is offset, you are still responsible for the full loan amount.