In this H&R Block refund advance loans review, we are going to provide you with essential information on how this product can be helpful especially for people who are anticipating tax refunds from the government.
According to Tax Policy Center (Urban Institute and Brookings Institution), there are “about three-quarters of American households pay federal income taxes, payroll taxes, or both,” while “almost all of those who owe no federal income tax do pay state income taxes, sales taxes, excise taxes, and/or property taxes.”
Furthermore, as per TPC, 65 percent of Americans who pay no federal income taxes owe payroll taxes.
Meanwhile, in data presented by Statista, the total tax receipts of the government of the United States in 2019 alone is $3.46 trillion. Federal receipts, meanwhile, have a 16.3% GDP in the same year. As with the U.S. state government tax revenue, it amounts to $1.09 trillion.
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Perhaps you are wondering why we are sharing these figures. Well, this is not just to show you how much money the government gets from people’s taxes, but that a lot of American people are responsible enough to pay taxes annually.
Paying taxes is a way of life – at least for adults. It’s an obligation, something that we owe the government, and in return, we get to enjoy the benefits of paying taxes. Needless to say, we get to enjoy tax refunds, too!
In a report published online by CNBC, it says that in 2019, “the federal government paid $260.9 billion in refunds to taxpayers.”
Speaking of tax refunds, H&R Block is just one of the many companies out there that offer a tax refund advance loans or also known as a refund anticipation loan (RAL), which basically refers to a loan that advances a person’s tax refund, according to Bankrate.
A RAL is a loan that is tantamount to a person’s federal income tax refund and is repaid by the refund. To put it simply, a RAL is helpful especially if a taxpayer needs the money A.S.A.P.
This whole RAL thing may be a bit complex for some that is why apart from an H&R Block refund advance loans review, we are also going to share with you a little information about RAL as we go along.
For your reference here are the things we are going to tackle in this review:
- Who is H&R Block?
- What do you need to know about the H&R Block refund advance loan?
- Who qualifies for an H&R Block refund advance loan?
- How to apply for an H&R Block refund advance loan?
- What are the pros and cons of H&R Block refund advance loans?
- What is a refund advance loan and how it works?
- What are the pros and cons of a refund advance loan?
WHO IS H&R BLOCK?
H&R Block is a company that offers no-interest tax refund advance loans at the start of tax season — that is, of course, if you opt to file your taxes with the company.
H&R Block, which was founded in 1955 by brothers Henry and Richard Bloch, aims to “provide help and inspire confidence in our clients and communities everywhere.”
To date, the company has prepared more than 800 million tax returns already. Over time, it has grown into the company that it is today with “retail locations in all 50 states, Puerto Rico and other U.S. territories, on U.S. military bases internationally and around the world.”
Furthermore, the company takes pride as being the “only company to offer a complete choice for consumers to get tax help on their terms with in person, online, and virtual options.” By adapting to change plus the expertise of highly trained professionals, and through innovation, the company is able to offer clients the “most personalized tax experience ever,” and the confidence that the company will get them their maximum refund.
WHAT DO YOU NEED TO KNOW ABOUT THE H&R BLOCK REFUND ADVANCE LOAN?
Before we move on, we thought you might want to check the below video by Steve TV Show wherein he tackles about H&R Block refund advance loan. We bet you will better understand the whole concept plus you’ll be more informed about this product/service, which you can avail of if need be.
Now, H&R Block is a large tax preparation and tax software company that offers refund advance loans at the beginning of tax season – as stated. They offer RAL in five loan amounts, which are $250, $500, $750, $1,250 and $3,500.
The H&R Block refund advance loans are a good option if you are anticipating a tax refund back from the government. By getting the loan, you get to access the money as soon as you file your taxes. But there is so much more information you need to know before availing of the said product/service.
Knowing the details is key to understanding what this product/service is all about. Needless to say, it will allow you to fully enjoy the benefits that come with it.
Having said that, here are the things that you need to know about the H&R Block refund advance loan:
It’s a no-interest loan.
Who doesn’t want to get a loan with no interest, right?
Offering a 0% APR is ultimately the biggest selling point of the H&R Block Refund Advance Loan. As simple as it is, if you apply for the loan, you don’t have to worry about paying interest rates, because it is absolutely interest-free.
To be honest, it is such a big deal because a lot of lenders today — most lenders — charge interest on their loans.
Does this sounds “too good to be true”? Well, let’s head on to the next thing.
The filing of taxes must be through H&R Block.
If you want to take advantage of the no-interest refund advance loan, you better make sure you file your taxes through H&R Block, and that you pay all fees that come with it.
Filing of taxes may be done at a participating H&R Block office. You may pay the tax preparation fees that go with it in there as well.
If you prefer filing your taxes by yourself, then, consider it as a major disadvantage. Rather, do not expect to qualify for RAL at H&R as it would be impossible.
Funds are deposited in an H&R Block prepaid card.
Unlike other lenders, when you are approved for an H&R Block Refund Advance loan, the money will be deposited into your H&R Block Emerald Prepaid Mastercard®instead of depositing it directly into your bank account.
Fortunately, there are no charges involve when making a one-time transfer via check or automated clearing house from your card account to your bank account. However, the H H&R Block Emerald Prepaid Mastercard® does come with a lot of fees that you might get overwhelmed if you will treat it as a typical debit card.
Just so you know, H&R Block Emerald Prepaid Mastercard®fees include:
- Reloading Fees – You can be charged up to $4.95 for cash reloading. The amount depends on the reload provider.
- Bill Pay Fees – You get charged for 95 cents for every bill pay.
- ATM Fees – You will be charged $3.00 per withdrawal and $1.50 for every balance inquiry or decline. Additional fees may be charged by the ATM operator as well.
- Inactivity Fee – If you go beyond 60 days without doing any transaction, you may as well be charged for a $4.95 monthly “inactivity” fee.
It provides repayment options.
H&R Block refund advance loan is a loan, which means, you will need to pay it back. Good thing, H&R Block provides a couple of options to repay the loan. This includes the following:
- H&R Block Emerald Prepaid Mastercard® – Perhaps the most convenient and the easiest way of repaying the loan or the borrowed money is by having the funds taken directly from the borrower’s tax refund. The remaining amount is loaded into the borrower’s H&R Block prepaid card.
- Refund Transfer – You may also pay off the borrowed money by allowing H&R Block to withdraw the amount you owe, plus the tax preparation fees, from your refund account. Whatever amount left will be forwarded to you depending on what you opt during tax preparation. It could be through direct deposit, check, or H&R Block Emerald Prepaid Mastercard®.
In addition to the above mentioned-information, here are a few more details that you need to know about the H&R Block refund advance loans:
It provides a prequalification option.
If you are worried about your credit score, well, good thing is that H&R Block refund advance loans will not affect your credit score as they only use soft inquiry to check a borrower’s credit standing before they get into a decision.
It is important to take note that pre-qualification does not guarantee loan approval. If you decide to get a loan, you have to submit a formal loan application when you file your tax return at H&R Block.
Same-day funding is possible.
Depending on the time of your application, once your loan is approved, you may get the funds as soon as the same day you apply. Just keep in mind that the maximum loan amount offered by H&R Block is $3,500. If you are expecting a tax refund higher than that, then you may consider other lenders instead.
A variety of fees and charges come with the loan.
While H&R Block offers a 0% interest rate loan, there are various fees and charges that are associated with the loan.
First, borrowers must pay their taxes with H&R Block to qualify for the loan. The average cost of filing a tax return with H&R is around $147.
A number of fees are also associated with the H&R Block prepaid card, which we have already discussed earlier.
WHO QUALIFIES FOR AN H&R BLOCK REFUND ADVANCE LOAN?
One important aspect that any H&R Block refund advance loans review must look into (and that a borrower must really check) is the qualifications set by the company as who is eligible for the loan and who’s not.
To qualify for the H&R Block refund advance loan, a borrower must be eligible for a tax return. Apart from it, the lending company may also take into account certain factors like the borrower’s credit score, as well as income history.
In addition to that, you must be using H&R Block to file a tax return. Otherwise, you are automatically disqualified for the loan.
HOW TO APPLY FOR AN H&R BLOCK REFUND ADVANCE LOAN?
Now that you already know what the qualifications are to be able to get an H&R Block refund advance loan, the next thing that you likely would want to know is the application process.
To apply for an H&R refund advance loan, all you need to do is follow these simple steps:
1. Gather all necessary documents for your tax return. This includes any tax forms as well as other relevant information like your personal details, Social Security number, etc.
2. File your taxes by availing H&R Block’s services. Again, you can only qualify for the loan if you file your taxes through H&R Block.
3. Check if you are eligible for a tax refund. Keep in mind that not all taxpayers are eligible for a tax refund. Thus, before you even think about a refund advance loan, you better check first if you are anticipating a tax refund.
4. Apply for an H&R Block refund advance loan. Once you have confirmed that you are expecting a tax refund, immediately apply for a refund advance loan.
5. If approved of the loan, receive the loaned amount either on a prepaid MasterCard or may be transferred via check or direct deposit. As mentioned earlier, depending on the time of loan application, and of course, your qualification, you can get loan approval within the day. At the same time, receive funds on the very same day you applied.
WHAT ARE THE PROS AND CONS OF H&R BLOCK REFUND ADVANCE LOANS?
Just like any other reviews we made, we are also going to share with you in this H&R Block refund advance loans review the different pros and cons we found.
This, hopefully, will give you an idea of whether or not an H&R Block refund advance loan is right for you.
PROS
- It is interest-free, which allows borrowers to easily access their tax refunds before the government has processed taxes and refunds.
- Tax preparation is deductible.
- You can loan money for up to $3,500.
- You can use your tax refund in paying off the refund advance loan.
CONS
- The product/service is only available to customers who file their taxes through H&R Block.
- The refund advance loan is only accessible through the H&R Block Emerald Prepaid Mastercard®, which makes it inconvenient for borrowers who prefer direct deposits.
- The prepaid Mastercard comes with various fees like reloading fee, bill pay services, as well as ATM use, an inactivity fee.
- There is a small window to be able to apply for the loan. For 2020, for instance, it was only available between January 4 and February 28.
WHAT IS A REFUND ADVANCE LOAN AND HOW IT WORKS?
Now that you already have the essential information about the H&R Block refund advance loans, this time around we are going to share with you rather give you a more thorough explanation of what a refund advance loan is all about, and how it actually works.
Also known as tax refund anticipation loan (RAL), according to Investopedia, a refund advance loan is “a loan offered by a third-party company like H&R Block against a taxpayer’s expected tax refund.”
By applying for a RAL, a borrower gets the tax refund he or she is anticipating before the government processes it.
So, how does it works?
According to Investopedia, when a taxpayer files an income tax form (which is done annually), he or she may be entitled to a tax refund. Tax refund refers to the excess amount of income tax that a taxpayer has paid to the state or to the federal government during the previous year by withholding from a paycheck.
The refund is usually issued within a few weeks after the tax returns have been submitted to the Internal Revenue Service (IRS).
Now, since the refund usually takes time, through the tax refund advance loans, a taxpayer gets to enjoy the refund more quickly. No need to wait until the government has issued a refund as a third-party company can issue it in the form of RAL. Depending on the lender, like in the case of H&R Block, the borrower may use the refund to repay the loaned amount.
WHAT ARE THE PROS AND CONS OF A REFUND ADVANCE LOAN?
Now, getting a refund advance loan does have its own list of pros and cons as well. This includes the following:
PROS
- The borrower gets immediate access to the money based on the tax refund that he or she is expecting from the government.
- You do not need a perfect credit history to qualify for RAL.
- In the case of H&R Block, for instance, you get to avail of a 0% APR loan.
CONS
- RAL may be a very expensive form of borrowing money — as some lenders charge fees and interests.
- In some cases, figuring out the loan details can be a bit challenging.
- Most lenders do not report tax refund loans to major reporting bureau, which means it won’t help you build credit.
FINAL THOUGHTS ON H&R BLOCK REFUND ADVANCE LOANS REVIEW
While paying taxes can be daunting at times, getting tax refunds is a totally different story. It’s as if you unintentionally saved an x amount of money or is it like that, really?
Now, while it takes a while to get your tax refund, third-party companies like H&R Block offers 0% APR refund advance loan option, which is very helpful especially for taxpayers who badly need cash as soon as possible.
How do you see H&R Block’s refund advance loan? Is it worth it?