The wait for your tax refund from the IRS can feel like an eternity — especially if you need the money to cover bills or make a big purchase.

A tax refund advance loan may allow you to receive a portion of your expected income tax refund before filing your taxes. But before you choose this option, read on to decide if it’s right for you.

A tax refund advance loan, also known as a refund anticipation loan (RAL), is a loan that allows you to borrow a percentage of your anticipated tax refund and repay it with your refund once the IRS processes your tax return.

Tax preparation companies typically offer these loans, and they work by estimating the amount of your tax refund based on your income and other factors. Once approved for the loan, you’ll receive the funds in a matter of days, allowing you to use the money to cover bills, make purchases, or handle other financial needs.

If you’re considering a tax refund advance loan, it’s crucial to understand how the process works. Here’s a look at the steps to take:

The amount you can borrow with a tax refund advance loan depends on a few factors, including your anticipated refund, the RAL program requirements, and your credit score.

The loan amount is usually a percentage of your refund. The tax preparation company will take out the tax preparation service charge and any applicable loan fees.

For example, you might be able to borrow $250 based on an expected federal refund of $500 to $999, according to TurboTax. The amount you can borrow depends on your unique situation and the lender’s policies.

Many tax preparation services and do-it-yourself tax software providers offer these loans. Here are a few to consider:

However, some of these companies only offer refund advance loans early in the tax season, often January to February each year.

While tax refund advance loans may seem like a convenient way to access a portion of your anticipated tax refund, it’s important to understand the costs involved. Some tax preparation services offer refund advance loans with no fees or interest, but you’re typically required to have them prepare your tax return, and they may charge a fee for that.

The exact costs of a tax refund advance loan will depend on the lender you choose, the amount you borrow, and the length of the loan. In general, however, you can expect to pay fees ranging from $30 to $50.

While that might seem like a relatively small fee, it’s pretty stiff when you look at the short time period. For example, borrowing $500 for two weeks with a $50 fee works out to an APR of approximately 250%.

Another factor to consider when calculating the cost of a tax refund advance loan is the impact it could have on your actual tax refund. If there’s a mistake on your return and your actual refund is less than expected, you’re responsible for paying back the difference out of pocket, which could create additional financial strain.

Eligibility for tax refund advance loans varies from provider to provider, but here’s an overview of some standard requirements:

While tax refund advance loans offer flexibility and convenience, they also come with certain risks. Here are some of the benefits and drawbacks of these loans:

If you’re considering a tax refund advance loan but are unsure if it’s the right fit, here are a couple alternatives that can help you get cash quickly:

Related: Learn more about getting a personal loan on Credible.com