Applying For A Loan With The Canada Child Tax Benefit

2016, along with the election of our new Prime Minister, Justin Trudeau, marked the start of several changes to our country’s policies on income taxes and other government benefit programs. This included some notable adjustments to the C.C.T.B. (Canada Child Tax Benefit), which as of July 20th, 2016 is officially renamed the “Canada Child Benefit” (CCB). 

We receive questions every day about a variety of different types of loans and the application processes that come with them. One question that we frequently receive is: “Will I qualify for a loan if I’m currently receiving the Canada Child Benefit?” While the answer to this question varies from lender to lender, here’s how you can use your Canada Child Benefit income to qualify for a loan.

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 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.

Child Tax Benefit Loans

	Loan Amount	Interest Rate	Term	Province Availability
	$500 - $35,000	2.99% to 46.96%	4 - 60 months	Across Canada	Learn More
	Up to $15,000	29.99% - 46.96%	9 - 60 months	BC, AB, SK, MB, ON, NB, NS, PEI, NL	Learn More
	Up to $20,000	19.99% - 46.8%	12 - 60 months	BC, AB, ON, NB, NS, PEI, NL	Learn More
	Up to $15,000	Started at 19.99%	Open-end	BC, AB, SK, ON, NS, PEI, NL	Learn More
	Up to $1,500	Varies by province*	Max 62 days	BC, AB, MB, ON, NB, NS, PEI	Learn More
	$200 - $1,500	Varies by province*	Next payday	BC, AB, SK, NS, YT, NT, NU	Learn More
	$50 - $1,500	Varies by province*	14 days	BC, AB, SK, MB, ON, NS	Learn More
	Up to $1,500	Varies by province*	Up to 62 days	BC, AB, ON	Learn More
	$120 -  $1,500	Varies by province*	Max 62 days	BC, AB, SK, MB, ON, NS	Learn More
	Up to $1,500	Varies by province*	Max 62 days	BC, AB, SK, MB, ON, NB, NS, PEI	Learn More

Child Tax Credit Loan Eligibility Requirements

When it comes to the majority of lenders, whether they’re banks or other organizations, the qualification standards will vary from loan to loan. 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)

Loan 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.

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.

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 A Child Tax Loan

• 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 cosigner’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. 
• Check Your Credit. As we said above, many lenders don’t check your credit before approval, but doing it yourself is a good way to know if you’re financially stable enough to handle going into debt.
• 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.

Cost Of A Personal Loan Or Installment Loan That Accepts Child Tax

Personal loans (a.k.a installment loans) have lower interest rates and longer repayment periods than a payday loan, so it tends to be cheaper and more manageable to pay off. 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. Here are some common factors you should consider before taking out a child tax loan.

Main Features To Consider When Calculating The Cost Of A Personal Loan Or Installment Loans That Accepts Child Tax

• Personal Loan Amount –  The larger the loan amount you qualify for, the more you’ll have to pay back. When you apply for a personal loan that accepts child tax as a source of income, you’ll be able to qualify for a larger amount than with a payday lender. These amounts can easily range between $300 to $10,000.
• Interest Rates – Interest rates have the greatest impact on your loan cost. Thankfully, interest rates on personal child tax loans are lower than payday loans, making them a cheaper option. The most a lender can legally charge you in Canada is 60% (APR).
• Term Length – One of the main reasons a personal loan is more affordable, is because it has loan terms than can extend to 5 years or more. However, longer terms lead to higher interest payments over the course of the loan. Be sure to factor in your loan term when calculating your total loan cost. 

Cost Of A Payday Loans That Accept Child Tax

Taking out a payday loan that accepts child tax (a.ka. baby bonus payday loan) is becoming increasingly popular amongst 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 accrued immediately. Here are some factors to consider when calculating the cost of your child tax payday loan. 

Main Features Of A Payday Loan That Accepts Child Tax

• Payday Loan Amount – To accurately calculate your loan cost, you need to find out how much you can qualify for. The larger the amount, the more interest you’ll pay. In Canada, you can only borrow up to $1,000 to $1,500 with payday lenders. However, that amount can shrinks further as some provinces limit the amount you can borrow up to 50% of your net income. 
• Interest Rate – As mentioned, the interest rate charged has the biggest impact on your loan costs. One of the reasons payday loans are recommended as a last resort is due to their high-interest rates and fees. APRs for payday loans that accept child tax can go as high as 600% or more. 
• Term Lenght – Another aspect to consider when getting a payday loan is the loan term. Payday loans have extremely short terms, most varying between 14 and 30 days. Depending on your term length, the total cost will vary. 

Maximum Cost Of A $100 Payday Loan By Province

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

The maximum amount you can get under the CCB program is:

• $6,997 per year for each child under the age of six.
• $5,903 per year for each child between the ages of 6 and 17 years old.  

Parents who have a child with a physical or mental disability can also qualify for an extra $2,985 per year for each child under the Disability Tax Credit (DTC).

Are you and your family eligible for the GST/HST tax credit this year?

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 Recieve 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.

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Loans And Your Canada Child Benefit

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.