Are you expecting a tax refund and need funds sooner? A Refund Advance could be an option to access money faster. This guide explains everything you need to know about Refund Advance loans, including eligibility, terms, and how it works.
Key Features of a Refund Advance Loan
A Refund Advance is essentially a short-term loan based on your anticipated federal tax refund. It’s important to understand that this loan is not your actual tax refund but rather an advance on it. Several key features define this financial product:
- 0% APR and $0 Loan Fees: One of the most attractive aspects is the absence of interest and loan fees, making it a cost-effective way to access funds early, provided you meet the eligibility criteria.
- Various Loan Amounts: If approved, you can receive a loan in one of several set amounts, typically ranging from $250 up to $4,000. The specific amount you are eligible for depends on your expected federal tax refund amount. Loans are often capped at 50% of your anticipated refund.
- Facilitated by Tax Preparation Services: Refund Advances are typically offered in partnership with tax preparation software companies like TurboTax and financial institutions such as First Century Bank, N.A. or WebBank. These banks are not affiliated with MVB Bank, Inc., Member FDIC.
Who is Eligible for a Refund Advance?
Eligibility for a Refund Advance loan is subject to specific requirements designed to assess risk and ensure compliance. You may not be eligible if any of the following apply:
- Address Limitations: If your physical address is missing from your federal tax return, located outside the US or a US territory, is a PO box, or a prison address, you will be disqualified. Residents of Illinois (IL), Connecticut (CT), or North Carolina (NC) are also currently ineligible.
- Age Restriction: You must be at least 18 years old to apply for a Refund Advance.
- Type of Tax Return: Returns filed on behalf of a deceased person or using specific IRS forms (1310, 4852, 4684, 4868, 1040SS, 1040PR, 1040X, 8888, or 8862) are not eligible.
- Minimum Refund Amount: Your expected federal refund must be $500 or more to qualify.
- Income Documentation: You must have received Forms W-2 or 1099-R, or be reporting income on Schedule C.
Additional Requirements:
- E-file with TurboTax: You are required to electronically file your federal tax return through TurboTax to be considered for a Refund Advance.
- Credit Karma Money Spend Account: You must either have or open a Credit Karma Money™ Spend (checking) account with MVB Bank, Inc., Member FDIC. This account is where your loan, if approved, and your subsequent tax refund will be deposited. Account openings are subject to eligibility, and terms and conditions apply.
How the Refund Advance Process Works
The process for obtaining a Refund Advance involves several key steps:
- Tax Filing and Application: Begin by preparing and e-filing your federal tax return using TurboTax. During this process, you can apply for a Refund Advance loan.
- IRS Acceptance and Approval Decision: Loan approval is not immediate. You will receive a final decision only after the IRS accepts your e-filed tax return. This acceptance triggers the underwriting process.
- Loan Disbursement: If approved, the Refund Advance loan will typically be deposited into your Credit Karma Money™ Spend account within 15 minutes of IRS acceptance. You can then access these funds online via a virtual card while waiting for your physical debit card to arrive in 7-14 days.
- Repayment from Tax Refund: Loan repayment is automatically deducted from your federal tax refund once it is processed by the IRS. This reduces the final refund amount you receive. Tax refunds are usually disbursed by the IRS within 21 days of e-file acceptance.
- Handling Insufficient Refunds: In the event your tax refund is less than the loan amount, you are generally not required to repay the remaining balance. However, you may be contacted regarding the outstanding balance and given the option to repay it. Failure to fully repay a loan may impact your eligibility for future Refund Advance loans.
Conclusion
A Refund Advance can provide quick access to funds based on your expected tax refund, offering a 0% APR and no loan fees. However, it’s crucial to understand the eligibility requirements and how the process works. Ensure you meet all criteria and are comfortable with the terms before applying. This option can be particularly helpful for those who need funds urgently and are confident in their expected tax refund amount. Remember to review all terms and conditions associated with both the Refund Advance loan and the Credit Karma Money™ Spend account to make an informed financial decision.
