Being a parent is great in so many ways, but sometimes all the extra expenses can be overwhelming. If you have one or more young children, you probably qualify for the Canada Child Benefit (CCB), a government program that provides parents with financial assistance.
But along with the financial support this program offers, did you know that you can use your CCB payment as a form of income to apply for a personal loan?
Keep reading to learn more about applying for CCB loans.
Key Points
- A child tax loan lets you borrow money using payments from the Canada Child Benefit as a source of income to qualify.
- While banks may not accept CCB payments as an income source, many alternative lenders do.
- Loan types you can get with CCB payments include personal loans, small cash advances, and payday loans.
What Is A Child Tax Loan?
A child tax loan is a short-term financing option that lets parents borrow money using their upcoming Canada Child Benefit (CCB) payments as income or security. These loans are generally available from alternative or private lenders, catering to bad credit borrowers or those with limited access to financial products.
Can You Get A Loan With Your Canada Child Benefit?
Though any loan you take out is typically dependent on your income, employment, and credit history, you may be able to use your CCB as leverage to get a loan. Since your CCB payment is considered part of your income, you can use it as a means to qualify for a loan.
However, to get approved for a loan while on CCB, you’ll need to find a lender that accepts child tax credit as a form of income.
Lenders That Accept Alternative Sources Of Income
- Amount
- $500 – $35,000
- Rate
- 9.99% – 35%
- Term
- 6 – 60
- Amount
- $100 - $1,500
- Rate
- $14.00 per $100.00
- Term
- 14 to 62 days
Types Of Loans You Can Get With CCB
There are a few types of loans you can generally qualify for with the Canada Child Benefit, such as:
Personal Loans
When you get a personal loan, you’ll receive a lump sum of cash that you’ll have to repay with interest in equal installments over a period of time. Personal loans (a.k.a installment loans) have lower interest rates and longer repayment periods than payday loans, so they tend to be cheaper and more manageable to pay off.
Requirements For Personal Loans That Accept Child Tax
Depending on the lender you apply with, requirements may vary. For example, while one lender may require a good credit score, another may not. Similarly, while one lender may require you to be employed, another may simply require a stable source of income.
Borrow Up To $50,000
Payday Loans
Taking out a payday loan that accepts child tax (a.k.a. baby bonus payday loan) is becoming increasingly popular among cash-strapped parents. CCB payday loans are easy to get, but should only be taken out in emergencies or in small amounts, as interest is high and is accrued immediately.
In Canada, you can only borrow up to $1,000 to $1,500 with payday lenders. However, that amount can shrink further as some provinces limit the amount you can borrow up to 50% of your net income. Payday loans also have extremely short terms, most varying between 14 – 30 days and up to a maximum of 62 days.
Requirements For Payday Loans That Accept Child Tax
Most payday lenders require proof of income, a valid bank account, and proof of identity to qualify. Most lenders also do not require a credit check, which makes it a good option for those with bad credit.
Small Line Of Credit: Bree and Nyble
Bree and Nyble are cash advance platforms that help consumers access small, interest-free advances. They both offer quick funding with no credit checks, making them ideal for bad credit borrowers and better alternatives to traditional payday loans.
- Bree: Cash advances from $20 to $500 are available that can be used to cover a variety of expenses and avoid NSF fees.
- Nyble: Cash advances from $30 to $250 are available, which can help build good credit with timely payments.
Requirements For Bree And Nyble
Getting approved for a small cash advance from Nyble and Bree is easy and requires no credit check. You’ll just need to have an active chequing account with a positive balance that accepts direct deposits. With Nyble, your bank account will be connected via Flinks for instant bank verification. With Bree, you’ll need to show at least 2 paycheques deposited on consistent dates.
Learn more: Nyble vs. Bree: Which One Is Better?
How To Apply For A Loan With The Canada Child Benefit
To apply for a loan with the Canada Child Benefit as your income source, follow these steps:
Step 1: Check Lender Requirements
Not all lenders accept CCB payments as income, so you’ll need to do some research to find lenders that do. A quick and easy way to do this is to use an online loan comparison site, like Loans Canada, which will populate a list of lenders that offer child tax loans that you can qualify for based on your financial situation. Be sure to compare interest rates, repayment terms, and fees before applying.
Step 2: Gather Necessary Documents
You may need to provide the lender with supporting documents to back the information in your application, such as:
- Proof of CCB payments
- Government-issued ID
- Proof of residency
- Additional income sources (if applicable)
It’s best to have these documents prepared in advance of application to speed up the process once you apply.
Step 3: Submit Your Application
Apply with your chosen lender and ensure all information is accurate to avoid any hiccups. Submit all relevant documents along with your application as per your lender’s instructions.
Step 4: Review Loan Terms
Before accepting the loan, read the terms and conditions carefully, paying particular attention to the interest rate, repayment schedules, and all fees.
Child Tax Loan Eligibility Requirements
When it comes to the majority of lenders, whether they’re banks or other organizations, the loan qualification standards will vary because no two loan situations are the same. The standards for the clients they take on, however, will remain relatively the same.
In other words, what any legitimate lender will want to know, first and foremost, is that you’re financially stable enough to pay back whatever amount of money they’re letting you borrow, along with any interest charges that apply. Depending on your chosen lender, their application process might include them checking:
- Your credit (report, history, and score)
- Your financial records (history of debt/bankruptcy, income, debt, etc)
- Your employment history (usually from the last 2 years)
While these categories are likely going to be the most important points to check off, other qualification areas might be subject to inspection, so it’s best to have all your financial and personal information updated and organized prior to applying.
Tips To Help You Improve Your Chances Of Qualifying For Child Tax Loans
To boost your chances of getting approved for a child tax loan, consider the following tips:
- Find A Trusted Co-Signer. Getting a close friend or family member to co-sign your loan application can help increase your chances of approval. Just make sure that they are also financially stable and ready for the lender’s review process.
- Look Into Guarantor Loans. These loans are meant for borrowers who can’t get approved on their own. With a guarantor loan, your co-signer’s credit will be checked instead of your own. By co-signing your loan, they’ll be agreeing to take over the remaining balance in the event that you can no longer pay it.
- Build Your Credit. A higher credit score shows lenders that you’re a responsible borrower, which can increase your chances of loan approval and secure a lower interest rate.
- Pay Off Your Other Debts. This is one of the most important things to do before making any financial decisions. If you already have other debts (credit card bills, etc.) it’s best to pay them off before applying for a loan. If you can pay your debt and still afford the loan, it’s safer to apply.
How Much Does A CCB Loan Cost?
The cost of a CCB loan depends on the lender, loan amount, interest rate, and fees. Since Canada Child Benefit loans are typically offered by alternative lenders, they likely have higher interest rates compared to traditional loans.
To get an accurate estimate, it’s best to compare loan offers from different lenders.
How Much Can You Borrow Through A CCB Loan?
The amount you can borrow through a Canada Child Benefit loan depends on your CCB payments, the loan type, and other financial factors. That said, you may be able to get anywhere from $50 to $35,000 or more.
Can I Get A CCB Loan Via E-Transfer?
Yes, many alternative lenders offer CCB loans via e-Transfer, allowing you to get access to the funds quickly and easily. Many of these lenders often provide same-day approval, with funding to follow shortly after.
Can I Get A CCB Loan With No Credit Check?
Yes, many lenders in the alternative lending sphere offer CCB loans with no credit checks required, making them more easily accessible for bad credit borrowers. Instead of checking credit scores, these lenders place more weight on other factors, including income, job stability, and collateral.
However, no credit check loans typically come with higher interest rates and shorter repayment terms compared to traditional loans. As such, it’s important to compare lenders and their offerings carefully to ensure you’re not paying more than you need to.
What Is The Canada Child Benefit (CCB)?
The Canada Child Benefit is a government program that provides families and single parents with financial assistance. It is a tax-free payment that families or single parents can apply for when they have a child or children who are currently under the age of 18.
The amount you can get through the child tax credit is dependent on certain criteria, including:
- How many children you have
- How old your children are
- How much income you make annually
- Your marital status
Are You Eligible For The Canada Child Benefit?
To be eligible for the CCB, you must have a child under 18 years of age under your primary care and be a Canadian resident. Parents that are eligible can apply online via their CRA accounts or submit the RC66 CCB application form.
In order to continue receiving these benefits, you must submit your income tax returns every year, no matter what your income is, even if you aren’t currently earning any income. This rule also applies to your spouse or common-law partner, if you have one.
How Will You Receive Your CCB Payments?
Once the parent is approved for the benefit, they’ll receive the payment in monthly installments via direct deposit or cheque, from July of that year until June of the following year. Once the parent and/or their spouse/common-law partner have filed their income tax returns, the sum of their benefit will be recalculated that coming July, based on the details of their return, until the child or children reach the age of 18.
Learn more: Canada Child Benefit (CCB) Payment Dates
Final Thoughts
Depending on the number of children you have and what age they are, the amount you receive from your Canada Child Benefit could be quite favourable. This, coupled with your yearly income, could help you along towards getting approved for the loan that you need. As long as you and your spouse, or you as a single parent, can show that you’ll be able to afford the cost of the loan payments, you should be able to find a lender that will suit your financial needs.
