Personal loans to pay taxes
A personal loan to pay a tax bill can make financial sense when the IRS interest and penalty rate (currently 8% annual for Q2 2026) plus any failure-to-pay penalties exceeds your personal loan APR. For taxpayers with good credit, a personal loan at 10-14% APR over 12-24 months may cost less than an IRS installment agreement with compounding interest and monthly setup fees. It also clears your IRS balance immediately, stopping accrual.
Why apply here.
- 01Pays IRS balance immediately, stopping penalty and interest accrual
- 02Fixed monthly payment vs. variable IRS accrual
- 03Loan amounts from $500 to $50,000
- 04APRs 7.99% to 35.99% depending on credit
- 05Soft credit check to compare, no score impact
About this loan.
Is a personal loan cheaper than an IRS payment plan?+
Depends on your credit. The IRS currently charges the federal short-term rate plus 3% (about 7-8% annually) plus a failure-to-pay penalty of 0.5% per month you don't pay the full balance. Combined, that's 13-14% effective annual cost if you use the IRS plan. A personal loan at 8-12% APR for a borrower with good credit is comparable or cheaper, with the added benefit of a fixed payoff date.
Can a personal loan pay state tax debt too?+
Yes. State tax agencies (FTB, NCDOR, etc.) also charge penalties and interest on unpaid balances. A personal loan can be used to pay any tax authority. State penalty and interest rates vary by jurisdiction; look up your state agency's current rate to compare against your personal loan offer.
Will the IRS accept partial payment while I get a personal loan?+
You can request a short-term extension (up to 180 days) from the IRS to give yourself time to arrange financing. During this window, interest and failure-to-pay penalties still accrue, but you avoid some setup costs. Filing an extension gives you more time to file your return, but does not extend the time to pay.
What if I can't qualify for a personal loan to cover my tax bill?+
The IRS offers several hardship options: an installment agreement (up to 72 months for balances under $50,000), an Offer in Compromise (settle for less if you genuinely can't pay), and Currently Not Collectible status (temporary suspension of collection if paying would cause undue hardship). A tax professional or IRS Taxpayer Advocate can help you navigate these options.