The Complete Guide to Tax Refund Loan Costs

A guide to tax refund costs and what to expect. If you are expecting a tax return then you probably can’t wait for the funds to land in your bank account. Many Americans use tax refunds to plan holidays, help them pay debts, or save for home or retirement. But as helpful as your expected refund can be, sometimes, the tax season can’t come soon enough.

For instance, suppose your car breaks down or, god forbid, you need to pay for surgery or medical equipment before your anticipated tax refund amount appears in your account. Getting a tax refund advance loan can be a good alternative in such cases. Tax return advance loans work similarly to other short-term loans, e.g., payday loans, with the loan amount based on your anticipated refund.

But while a tax advance loan can prove itself useful in certain situations, such loans come with several associated fees and costs. How much does a tax refund loan cost? We’ll answer that and more in the following guide.

How Do Tax Refund Loans Work?

First, a little explanation of how tax refund advance loans work. Also referred to as income tax loans, an official name for a tax refund advance loan is a refund anticipation loan (RAL). Essentially, it’s a short-term loan you repay through your expected federal tax refund amount.

These loans typically range from several hundred to a few thousand dollars (usually up to $5,000) and don’t include any credit history requirements or collateral. To be eligible for a tax refund advance loan, you will need to prepare your tax documents confirming your tax return amount. In most cases, you will receive the loan on a prepaid card or as an electronic deposit, with the loan amount being your anticipated return minus any associated loan fees.

How Much Does a Tax Refund Loan Cost?

An early refund advance loan can provide invaluable help when you need to quickly cover some unexpected expenses, such as vehicle repairs or emergency travel costs. Another significant benefit of refund advance loans is that they don’t come with strict credit score requirements. Tax advance loans also don’t require any collateral. That means anyone with an expected tax refund can take such a loan.

However, as beneficial as early refund loans can be, they also come with several associated fees. Their exact amounts will depend on your situation, and they may include an application fee and tax preparation fee. Such loans also come with higher interest rates than other, more traditional loan services. Let’s discuss in more detail how much one can expect to pay when taking up a loan against tax returns.

Application Fee

Some lenders might charge an application fee. Such a fee typically costs around $100 and is charged the moment you apply for a tax refund loan. And while it is a common practice among many lenders to charge such fees when applying through Income Tax Loans Now, you won’t need to pay anything for your application, which you can either submit via our online form or a phone call. We will then connect you with one of our lenders, who will provide all the details regarding your tax refund loan.

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Tax Preparation Fees

Before you even submit the loan application, though, you will need to have all the tax paperwork ready. This is where tax preparation services come in. Some lenders also serve as tax preparers, charging their customers additional tax preparation fees.

When using our services, however, we won’t charge anything for tax preparation. That’s because we are not a tax preparation service. Moreover, we match borrowers with lenders without any paperwork required. Our no-fee refund advance loan application service is 100% free, and we don’t charge any additional charges.

However, we do recommend having your taxes prepared as soon as possible. Getting all your documents ready early will ensure you know the amount of your federal tax return, ensuring you don’t borrow more than you can afford. If you aren’t sure how to do that, working with a professional tax preparer could be a good idea, though.

Interest Charges

Although tax refund loans offer multiple benefits, they also usually come with increased interest rates. And while their exact amount will depend on the lender, most borrowers should expect at least a double-digit interest rate.

Unfortunately, that’s not something you can avoid. However, where Income Tax Loans Now can help is connecting you to the best possible lender. All our online lenders offer some of the most competitive interest rates in the industry, ensuring your early refund advance loan doesn’t put a dent in your finances.

How to Calculate a Tax Return Loan Cost?

Although tax refund loans aren’t difficult to understand, there can be multiple costs affecting how the final cost of your loan will look like. Luckily, you don’t have to do the calculations yourself. By using our loan request form, you will be matched with the best possible online lender for your particular situation, providing you with the exact cost of your possible refund advance loan. That way, you will be able to see what loan amount you can afford.

How to Qualify for a Tax Refund Advance Loan?

The best thing about tax refund advance loans is that there are practically no qualification requirements. All eligible taxpayers who expect a tax refund can apply for a tax income loan as long as they:

• are 18 years old or older,

• have a job or regular source of income,

• have a checking account or savings bank account,

• are US citizens.

One of the most significant advantages is also the lack of a credit check. Even taxpayers with bad or no credit history can apply and be accepted. However, while that may be considered a benefit, it also affects interest rates, which tend to be higher for tax refund loans.

Another requirement to keep in mind is the minimum federal tax refund loan amount you can borrow. This will depend on the lender but usually oscillates between $100 and $500.

Where to Get a Tax Refund Advance Loan?

Filling out your taxes and calculating the costs of a possible refund advance loan while searching for a reputable lender sounds daunting. And it is, especially if you need your refund amount to cover emergency expenses. In such instances, time is of the essence.

At Income Tax Loans Now, we understand that perfectly. That is why we provide tax loan borrowers with a rapidly-fast application system. All it takes to get your instant loan decision is choosing the amount you want to borrow, for what you need the loan, and then entering several personal details.

We will then connect you with one of our reputable lenders, who will deposit the funds into your bank account as soon as the next business day. Our network of lenders consists only of reputable and experienced professionals, ensuring every borrower using our services gets the loan offer tailored to their specific needs.

Whenever you need to get your tax refund early, Income Tax Loans Now has got you covered. Apply today and get an instant refund advance loan decision.

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The Bottom Line: Should You Get a Tax Refund Loan?

If you don’t want to wait for the IRS to process your tax refund or need an instant cash influx to cover unexpected or emergency expenses, getting a tax refund advance loan sounds like an excellent financing option. However, while such loans offer numerous benefits, such as the lack of credit checks, they include several costs one must consider before applying.

As covered, these fees usually include tax preparation fees, application fees, and higher interest charges. Additionally, some lenders may charge other fees, which can affect your final tax loan cost. Once summed up, you may face a dilemma on whether you can afford a tax refund loan. That depends on your situation. As covered, if there’s an emergency expense you need to cover, such a loan offers an instant cash influx.

What we can recommend is preparing your taxes and other tax documents as soon as possible to ensure how much you can borrow if an emergency occurs. Once you have that information, use our application form or call us directly to get the loan quote tailored to your situation and requirements.

FAQs

Will an early refund advance affect my credit score?

It will if you can’t repay it. That is why it’s so vital to calculate all the tax loan fees and costs to decide whether you can afford it. It’s also a good idea to fill out your taxes as soon as the tax season comes to ensure you will have the possibility to file for a tax refund loan in case of an emergency. Otherwise, you risk damaging your credit history.

What are tax refund loan alternatives?

The most obvious alternative to tax refund loans is waiting for the IRS to process your tax refund. And if you don’t have time to wait until your refund arrives or there’s an unexpected expense you need to pay, a tax refund loan offers a good solution.

There may also be the case of your expected refund not being high enough to loan against it. In such a case, you can opt for other loan services, such as payday loans, installment loans, or line of credit loans. These can help pay some emergency expenses without affecting your tax refund, although you can also use it to repay the loan.

What fees do I need to pay for a tax refund loan?

Tax refund loan fees will vary between lenders. However, in most instances, you can expect to pay tax prep fees and application fees. Some lenders may also charge additional fees for how you receive your loan, whether it’s a direct deposit or prepaid card. Another cost to consider when considering a tax advance loan is the higher interest rate associated with such loans.

Can I apply for a refund advance loan without a good credit score?

Yes. In fact, that’s one of the most significant advantages of tax refund advance loans. Many lenders won’t even check your credit history, meaning you can gain access to additional funds without worrying about your credit score. On the other hand, though, such practices affect expected loan interest rates, which are higher than traditional loans.

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