If your main source of income is government benefits, getting a traditional loan in Canada might be a bit of a challenge. That said, you can still get your hands on a loan despite collecting benefits from employment insurance (EI), disability, a pension, or any other form of government assistance. More specifically, let’s discuss how to get payday loans with government benefits.
Key Points:
- Payday loans with government benefits are available to consumers in Canada.
- You’ll need to find a lender who specifically accepts government benefits as a source of income before applying.
- Payday loans while on government benefits can provide fast funding without the need to meet stringent requirements, but they’re also very expensive and can be difficult to repay within such a short time frame.
How To Get Payday Loans With Government Benefits In Canada
There are plenty of payday lenders out there that provide short-term loans with flexible lending criteria, including the following.
- Amount
- $300 – $35,000
- Rate
- 9.99% – 34.95%
- Term
- 6 – 60 months
- Amount
- $100 - $1,500
- Rate
- $14.00 per $100.00
- Term
- 14 to 62 days
- Amount
- Up to $1,500
- Rate
- $14 per $100
- Term
- Up to 60 days
Loans Canada
Loans Canada is an online loan comparison platform that helps consumers connect with top lenders across Canada. With Loans Canada, you can quickly find a payday lender that doesn’t require standard employment for loan acceptance, and instead accepts government benefits. Check out CompareHub to find a lender and qualify with a single application.
Spring Financial
Spring Financial is an online lending firm that provides loan products and credit-building solutions to Canadian consumers. In particular, Spring Financial offers personal loans up to $35,000, cash advances up to $1,500, and a credit-building program to help you build good credit and save money. For those who rely on government benefits, Spring Financial’s Evergreen Loan can make it easy to qualify for financing while building a good credit score.
Spring Financial Evergreen Loan Features:
- Loan Amount: Up to $1,500
- Loan Repayment Terms: Up to 18 months
- Interest Rates: 18.99%
Magical Credit
Magical Credit is an online lender that provides cash loans and installment loans. The lender accepts just about every form of government benefits, including EI, CPP, baby bonuses, maternity benefits, and private pensions. All you need is a regular income that is deposited directly into your bank account once a month to qualify.
Magical Credit Payday Loan Features:
- Loan Amount: $100 – $1,500
- Loan Repayment Terms: 14 – 62 days
- Interest Rates: $14 per $100 borrowed
iCash
iCash is an online lender that provides quick access to cash to residents in all 10 provinces. You can borrow up to $1,500. When you apply, the system’s algorithms will assess the information you enter and will provide you with a loan amount accordingly.
Your funds will be sent to you immediately if you choose to receive your loan through e-Transfer. iCash accepts all types of income, including those supplied by government agencies. As long as you meet the lending criteria, you can apply for a loan.
iCash Payday Loan Features:
- Loan Amount: Up to $1,500
- Loan Repayment Terms: Up to 62 days
- Interest Rates: $14 per $100 borrowed
Cash Money
Cash Money is an online lender that offers payday loans, auto equity loans, and lines of credit to Canadians in every province. Their loans range from $100 to $10,000, though the exact maximum amount depends on the loan type and province.
Cash Money accepts government-assisted income, including EI, Social Assistance, Canada Child Benefit, and CPP. However, Social Assistance income is not accepted for residents of Manitoba.
If approved for a loan, you can receive the funds immediately if you visit a physical Cash Money store, or in as little as 15 minutes if you choose to have the funds sent via Interac e-Transfer. Funding times for direct bank deposits will vary depending on the financial institution.
Cash Money Payday Loan Features:
- Loan Amount: Up to $1,500
- Loan Repayment Terms: Up to 62 days
- Interest Rates: $14 per $100 borrowed
LoanMeNow
LoanMeNow is an online lender that provides short-term loans to Canadian consumers. Loan amounts are available for up to $1,000, with no credit check required and funds available within 24 hours.
LoanMeNow Loan Features:
- Loan Amount: Up to $1,000
- Loan Repayment Terms: Up to 90 days
- Interest Rates: Up to 32%
GoDay
With GoDay, you can apply for a payday loan amount anywhere between $100 to $1,500, though your financial situation will affect the amount you qualify for. If approved, the funds are delivered to you in as little as one hour.
You don’t have to be employed in order to get approved for a short-term loan from GoDay. Instead, you can rely on income from your Canada Child Benefit, Disability Tax Credit, CPP, Old Age Security, and any private pension and still secure a loan.
GoDay Payday Loan Features:
- Loan Amount: $100 – $1,500
- Loan Repayment Terms: 14 days
- Interest Rates: $14 per $100 borrowed
My Canada Payday
My Canada Payday is an online lender that provides payday loans for up to $1,500 in as little as 15 minutes via e-Transfer. Simply fill out a one-page online form and you’ll receive an instant cash advance as long as your application checks out.
Bad credit is accepted, so there’s no need to deal with the hassle of meeting minimum credit score requirements to get approved. Plus, you can get approved even if you’re not employed. My Canada Payday accepts government benefits, including disability benefits, pensions, and the Child Tax Benefit (CCB).
My Canada Payday Loan Features:
- Loan Amount: Up to $1,500
- Interest Rates: $14 per $100 borrowed
- Loan Repayment Terms: By your next payday
Which Government Benefits Are Accepted As A Source Of Income For Payday Lenders?
There are plenty of government benefits available that provide financial assistance to Canadians in different situations. If you are one of those Canadians who currently collect some form of benefit and use those funds as a main source of income, you might be wondering if your specific government benefit will qualify you for a payday loan.
Can You Get A Payday Loan With Employment Insurance (EI)?
Yes, you can get a payday loan while collecting EI benefits, though this depends on the lender. When applying for a payday loan with a lender that accepts EI as a form of income, your loan won’t affect your benefits. The key is to find a lender who states they work with Canadians who collect EI.
Learn more: Loans On Employment Insurance
Can You Get A Payday Loan With Child Tax Benefits (Canada Child Benefit)?
If you depend on your Canada Child Benefit (CCB) as an income source, you’ll need to find a payday lender who accepts these government benefits as income. Luckily, the requirements for payday lenders are typically lax, so you shouldn’t have a problem finding a payday lender who will extend a loan to you if you collect these benefits.
Learn more: Applying For A Loan With The Canada Child Tax Benefit
Can You Get A Payday Loan With Disability Tax Credit?
Payday lenders assess your overall income to determine whether or not to approve your loan application. If you’re currently receiving a Disability Tax Credit, you should be able to get approved for a payday loan, as long as the lender you work with accepts this type of benefit as a form of income.
Can You Get A Payday Loan With Canada Pension Plan (CPP) Or Old Age Security (OAS)?
Although you might find it a bit more challenging to get a loan from a traditional lender using only your pension, there are plenty of payday lenders out there who supply short-term loans to Canadians in your position.
How To Apply For A Payday Loan With Government Benefits
Applying for a payday loan with government benefits is easy and can be done from the comfort of your home. Follow these steps:
Step 1: Gather Your Documents
When applying for a payday loan, you’ll need to provide the following information or documentation:
- Personal Information: You’ll need to provide information about yourself, including:
- Full name
- Home address
- Phone number
- Email address
- Financial Information: Your lender will want to know how much you earn, and the sources of your income. You may also need to provide your bank statements.
- Banking Information: For funding and repayment, your lender may require certain banking information, such as your direct deposit information.
Step 2: Choose A Lender
Use an online loan comparison site, like Loans Canada, to find and compare different payday lenders and their offers. In particular, you’ll want to find lenders who accept government benefits as an income source.
Step 3: Complete The Application
Once you’ve chosen a lender, complete their application, whether online or in person, ensuring that all fields are filled out and all information is accurate. You’ll also need to submit the documentation you gathered earlier as proof of the information on your application.
Step 4: Receive Your Funds
As long as all information on your application and the documents you provide meet the lender’s requirements, you’ll be approved for a payday loan and receive your funds shortly after. Keep in mind that these loans come with a very short repayment period, so you’ll need to make sure your finances are in order to pay off the loan within the short time frame.
Learn more: How To Apply For A Loan
What Are The Eligibility Requirements For A Payday Loan With Government Benefits?
To be eligible for a payday loan, you’ll need to meet the following criteria:
- Be at least the age of majority in your province/territory
- Be a Canadian citizen or permanent resident
- Have an active bank account
- Have a steady income source (including government benefits)
Cost Of A Payday Loan With Government Benefits
The rules and regulations for each province vary. Below is a table depicting the costs and rules surrounding payday loans in your province.
Maximum Cost Of A $100 Payday Loan By Province
| Province | Max cost per $100 borrowed | Max Penalty for Returned Cheque | Cooling Off Period | Loan Rollover or Extension |
| Ontario | $14 | $20 | 2 business days | Not allowed |
| British Columbia | $14 | $20 | 2 business days | Not allowed |
| Alberta | $14 | $20 | 2 business days | Not allowed |
| New Brunswick | $14 | $20 | 48 hours (not including Sundays and holidays) | Not allowed |
| Manitoba | $14 | $20 | 48 hours (not including Sundays and holidays) | Allowed |
| Saskatchewan | $14 | $25 | Next business day | Not allowed |
| Nova Scotia | $14 | $20 | Next business day (or 2 days for online payday lenders) | Not allowed |
| Newfoundland and Labrador | $14 | $20 | 2 business days | Not allowed |
| Prince Edward Island | $14 | $20 | 2 business days | Not allowed |
| Quebec | 35% AIR | $20 | 10 days | Not allowed |
Benefits Of Payday Loans With Government Benefits
There are several perks to payday loans, especially for those who rely on government benefits as their main source of income:
- Fast funding. Payday loans are notorious for their quick funding. You can get access to your loan almost immediately after applying, which can be very helpful if the funds are urgently needed, especially if you receive your funds via e-Transfer.
- Online application. While you may be able to visit a physical branch, payday lenders typically offer an online application that can be submitted without the need to leave your home.
- Bad credit accepted. There’s no need for stellar credit to get approved for a payday loan. Although, working to build better credit is a good way to avoid having to take out a payday loan.
- Non-traditional income sources accepted. If your main source of income is a government benefit, you can still get approved for a payday loan regardless of whether you’re employed or not.
Drawbacks Of Payday Loans With Government Benefits
Along with the benefits, there are also some disadvantages that you should consider before applying:
- Costly. Interest rates associated with payday loans are very high compared to traditional loan types, making payday loans very expensive.
- Short terms. The funds you apply for must be repaid in a very short period of time. Usually, the money must be paid back in full by the time you receive your next deposit from your government benefit, which doesn’t leave you much time.
- Small loan amounts. If you need a large loan amount to cover a big expense, the loan amount you get from a payday loan may not be sufficient.
Bottom Line
If you’re currently receiving government benefits of some sort, you may still be eligible to apply for a payday loan without your benefits being affected. Just be sure to seek out alternative lenders that deal specifically with borrowers whose main source of income is government benefits. It’s important to note, however, that payday loans should only be used as a last resort, as they typically come with sky-high interest rates and must be repaid shortly after the funds are extended.
