What you need to know about tempting refund-advance loans

People who are looking for fast cash to pay holiday bills, unexpected car repairs or skyrocketing heating bills are being bombarded with TV ads, window signs and other pitches for tax refund advances.

Actor Jon Hamm, wearing bib overalls, laments being stuck after his old truck breaks down in a Dust Bowl setting in an H&R Block commercial.

“There’s got to be a way to get us some money fast,” Hamm’s character says. “If only there was some kind of advance we could get on our tax refund.”

The pitch is tempting, especially when the commercial says up to $3,000 could be available in an advance. Jackson Hewitt, which has its own refund advance product, noted that 43 percent of millennial taxpayers polled indicated in a recent survey that they plan to use their tax refund to pay holiday debt, compared with 31 percent of the general population.

The refund loan products are relatively new. Consumers must dig into the details to understand what kind of loan they might expect and exactly what’s being offered.

The advance loans are made by banks — and secured by and repaid directly from a consumer’s tax refund. As a result, the size of the loans will be limited.

So, if you’re owed a $3,000 tax refund, there’s no way you’re getting a $3,000 refund advance loan. Yet the big number is what consumers will see first.

Through Feb. 28, a 0 percent interest loan for up to $3,000 is being offered to current and new customers at H&R Block. If approved, H&R Block says, clients will typically have access to money the same day they apply.

Jackson Hewitt has a product that promises up to $3,200 — up from a maximum of $1,300 last year — for a 0 percent interest loan.

Liberty Tax is promoting what it calls “the largest tax refund advance offer in the industry” with its Easy Advance Loan of up to $3,250 through Feb. 28. No fees or interest are associated with the loan.

Tax refunds, of course, can be the single biggest financial payout for many consumers each year.

The demand for refund advance loans is being driven up after a crackdown to combat tax refund fraud.

The Internal Revenue Service is now required to hold back some tax refunds for those claiming the Earned Income Tax Credit or the Additional Child Tax Credit. Last year, about 15 million people who filed early in the season faced those delays.

The IRS warns tax-return filers that refunds that include such credits will not show up in a taxpayer’s bank account or debit card until at least Feb. 27 for those choosing direct deposit. But there could be more delays, if there are other issues with the tax return.

An important point: The delay applies to the entire refund, not just the portion of refund money that’s associated with these credits.

So the IRS advises consumers not to bank on getting a refund by a certain date, especially when making major purchases or paying bills.

If you feel you cannot wait, well, you’re going to be eager to listen when someone starts talking about ways to get fast cash. Here are some points to consider:

EVERYONE ISN’T GETTING A 0 PERCENT LOAN OF $3,000 OR SO >>

Liberty Tax, for example, notes that to be eligible for the maximum $3,250 loan amount, you’d need an expected federal income tax refund — minus authorized fees for tax preparation services — that amounts to at least $5,095.

The available loan amounts at Liberty Tax are $500, $800, $1,300, and $3,250.

The actual loan amount will vary based on the expected refund amount, ID verification, eligibility criteria and underwriting.

The refund advance loans at H&R Block are in four different amounts — $500, $750, $1,250 or $3,000 — depending on what you’re qualified to receive.

H&R Block said a client needs to be due a federal income tax refund of at least $1,000 to be eligible for a refund advance and meet underwriting criteria.

The average federal income tax refund last year, according to the IRS, was $2,782.

Jackson Hewitt customers can get loans available in amounts of $100, $200, $500, $750, $1,000 or $3,200.

YOU CANNOT GO ONLINE TO GET ONE OF THESE ADVANCES >>

You’re going to need to visit a tax professional and have your taxes prepared at a participating H&R Block, Jackson Hewitt or Liberty office to obtain any of these loans. Jackson Hewitt also has tax preparation offices in Wal-Mart stores, too.

NO FEE DOES NOT EQUAL NO COST >>

Most of these promotions for refund advances highlight that there are no finance charges and no loan fees associated with the loans.

But this is key: Any tax preparation fees would apply. So you want to try to understand what you might pay to get your taxes prepared at a given location.