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If you’re a senior citizen living off of your pension and you experience some sort of financial emergency and suddenly find yourself with a lack of savings funds, you might need to take out a loan to cover the cost. Unfortunately, the things you’ve got going on in your life can really affect your ability to qualify for a loan.

Apart from your current debts and credit score, your income level and source of income can affect your ability to get a loan. Find out if you can get an OAS loan in Canada.

Can You Get An OAS Loan?

Old Age Security (OAS) is a tax-sponsored monthly payment that Canadian pensioners can start collecting at age 65. Its main purpose is to give people a regular source of money to cover their basic living costs following retirement. As such, OAS is generally treated as a form of income that many alternative lenders will accept when you apply for a loan. 

That said, if you’re an older resident and making less income by that point in your life, it can be tough to qualify, especially with banks, credit unions and other prime lenders. So, before they’ll approve you for a loan, some lenders will want you to be under the age of 70 and still working. You may also need a good credit score and a healthy payment history.

Lenders That Accept Alternative Sources Of Income

Loan Amount Interest Rate Term Province Availability
Loans Canada Logo
Loans Canada
Up to $50,000prime to 46.96%4 - 60 monthsAcross Canada Learn More

Spring Financial
$500 - $35,0009.99% - 46.96%6 - 60 monthsBC, AB, SK, MB, ON, NB, NS, PEI, NL Learn More
Magical CreditUp to $20,00019.99% - 46.8%12 - 60 monthsBC, AB, ON, NB, NS, PEI, NL Learn More
Lend Direct
Up to $15,000Started at 19.99%Open-endBC, AB, SK, ON, NS, PEI, NL Learn More
Up to $1,500Varies by province*Max 62 daysBC, AB, MB, ON, NB, NS, PEI Learn More
Speedy Cash
Speedy Cash
$200 - $1,500Varies by province*Next paydayBC, AB, SK, NS, YT, NT, NU Learn More
My Canada Payday
My Canada Payday
$50 - $1,500Varies by province*14 daysBC, AB, SK, MB, ON, NS Learn More

Up to $1,500Varies by province*Up to 62 daysBC, AB, ON  Learn More
Money Mart
$120 -  $1,500Varies by province*Max 62 daysBC, AB, SK, MB, ON, NS Learn More
Up to $1,500Varies by province*Max 62 daysBC, AB, SK, MB, ON, NB, NS, PEI Learn More
*The maximum borrowing cost for a payday loan varies by province, learn more here.

Types Of OAS Loans

Since many lenders don’t accept applicants who are using OAS as their main source of income, so you may have to deal with certain conditions, some of which you’ll see below. Here are a few loans you can qualify for while benefiting from OAS:

Payday OAS Loan

Payday loans are small loans of $100 to $1,500 with terms of 14 – 30 days. They are easy to get, as long as you’re a Canadian resident, over the age of majority in your province (18 – 19+) and have a regular source of income. However, these loans can have extremely high-interest rates and can cause bad debt issues if you’re not careful.    

Personal OAS Loan

You may be able to get an OAS personal loan through an alternative lender in Canada. However, the amount you qualify for will vary based on your OAS payment amounts, debts and overall financial health. To help you qualify, you can opt for a secured personal loan, this involves putting up collateral such as a house or car. While this can lead to better approval odds and lower interest rates, your asset can be seized if you default.     

Guarantor OAS Loan

If you can’t qualify for a loan using just your OAS payments, try asking a friend or family member to cosign your application. They must have good finances and credit to qualify but this can help you get a larger loan with a better rate. Just make sure to warn your cosigner of the potential consequences; if you can’t afford your loan payments, they’ll have to cover your remaining debt.

Borrow Up To $50,000


Steps On How To Get An OAS Loan

Although benefiting from OAS can make things a little more difficult when you apply for a loan, the application process itself is pretty easy. Just follow these three steps:

  1. Complete Your Application – Start by filling out an application, which will involve listing your personal, financial and banking information. If possible, it’s also a good idea to prequalify with your lender beforehand to see how much you qualify for and at what rates.
  1. Provide Documentation – Most lenders will ask for at least one piece of photo identification (issued by the government) to verify your address and residency status. Acceptable documents include your passport and/or driver’s license. 

The most important factor is your gross income, so you must provide proof of your OAS payments, as well as any money you make from employment and other government subsidies, like CPP (Canada Pension Plan).

  1. Get Funded – Once you provide all the necessary information, your lender will review your application. If approved, you’ll receive your funds via e-transfer or direct deposit within 24-48 hours. 

Requirements For Getting An OAS Loan

Here are some of the things that lenders will normally look at when you apply for a loan on OAS: 

  • Personal Identity Information – As mentioned, you must be a Canadian citizen or permanent resident to apply for a loan while on OAS. You also have to provide details like your name, address, date of birth and Social Insurance Number (SIN). 
  • Financial Information – Lenders will then examine your income (including OAS info), job status, debts and credit history to verify your ability to make payments. The stronger these elements are, the easier it is to qualify for a favourable loan.  
  • Banking Information – After, the lender may ask for a VOID cheque or pre-authorized debit form so they can deposit your loan and withdraw payments.

How To Improve Your Chances Of Getting An OAS Loan?

Here are some steps you can take to raise your chances of approval for a loan on OAS:

Compare Lenders

Prior to applying, don’t forget to shop around and look at several sources of credit to find the best loans and interest rates. Every lender has different conditions for their loans, so it’s important to do your research and choose a lender whose minimum requirements you meet to increase your odds of approval.

Apply For A Small Loan

To increase your chances of approval, consider applying for a small loan, just enough to cover your most essential costs. Lower loan amounts will reduce the risk for the lender and increase your odds of obtaining a loan with a lower interest rate and a more flexible term.    

Improve Your Credit

Credit scores are an indicator of your ability to repay your loan on time. If you have poor credit, lenders are less likely to approve you. A good credit score of 650 to 900 is the best way to get a favourable loan while you’re on OAS.

Find A Cosigner

If you can’t qualify alone, you can increase your chances by finding a cosigner with a better income and credit score than yours. Just remember to warn them about the potential consequences of a guarantor loan (i.e. they’ll become responsible for your payments if you can’t make them) 

Apply For A Secured Loan

To increase your odds of qualifying for a loan on OAS, you could offer up a valuable asset as collateral, such as your car or house. Like a cosigner, collateral reduces the risk for the lender. Be very careful here, because they can legally sell the asset if you miss too many payments.  

What Does It Cost To Get A OAS Loan?

If you plan to apply for a loan while benefiting from OAS, watch out for these costs: 

  • Interest – Interest is the largest cost you’ll have to consider when you get a loan, whether you’re using OAS or any other form of income to pay for it. Interest rates and payment conditions vary from lender to lender but, typically, the worse your credit and finances are, the higher your rate will be.     
  • Term – Your loan’s payment term can affect your interest rate too. Generally, longer terms can cause you to pay more interest over the course of your loan.  
  • Fees – No matter where or how you apply for your loan while on OAS, the lender could charge you a variety of single or recurring fees, including but not limited to:
  • Origination fees (for the lender to deposit and manage your loan)
  • Penalty fees (for any missed, short or late payments) 
  • Documentation fees (for the lender to process your paperwork)
  • NSF fees (for bank accounts with non-sufficient funds during payments)
APRMonthly PaymentTotal InterestTotal Cost
*$1,000 personal loan with a 1-year term.

What Is The Old Age Security Program?

The O.A.S. program is a pension program that supplies a monthly payment to senior citizens who are 65 years of age or older. In fact, an automatic enrollment process was put into effect by Service Canada, so, you may automatically receive a notice of your enrollment in the program one month after your 64th birthday. However, in some cases, you may need to apply for the program. Your first OAS payment should come one month after your 65th birthday.

Who Qualifies For OAS?

To qualify for OAS, you’ll need to meet the following criteria: 

  • Be at least 65 years old and be official citizens or residents of Canada 
  • Must have lived as Canadian residents for at least 10 years (20 years if you live outside of Canada) after turning 18. 

Unlike with the Canada Pension Program, a senior citizen’s employment history will not be taken into consideration during the OAS application process. 

How Much Will You Get Through The OAS Program?

The amount that you will receive through the OAS program is calculated based on the number of years you have lived in Canada after turning 18. Anyone who has been listed as a Canadian resident for at least 40 years after their 18th birthday will become eligible for full benefits. The maximum OAS payment you can receive is $666.83 if you’re between the ages of 65 – 74 and $733.51 if you’re over the age of 75. 

Bottom Line

If you’re planning on using your Old Age Security benefit as your only source of income in the future, it’s important to start budgeting and saving as soon as possible. While you can get a loan on O.A.S to cover expenses, it’s not recommended unless you need to.

OAS Loans FAQs

Can I get a loan if old age security pension is my only source of income?

Income is an important factor lenders take into consideration when determining a borrower’s eligibility for a loan. While most lenders require you to be employed and have stable employment, other lenders accept alternative income sources, including government benefits. Do note that these lenders often charge higher interest rates and offer shorter loan terms. 

Is it a good idea to get a loan using my O.A.S?

Even when you’re getting the full OAS pension amount, that monthly income still might not be enough to cover all your expenses. Especially for certain expensive costs like senior-living care facilities, private nurses, or home installations (ex: wheelchair ramps and stair lifts). In such cases, getting a loan using your O.A.S might help beneficial. 

Who offers OAS loans?

While banks and other traditional financial institutions don’t offer OAS loans, there are many alternative online lenders that do. Even if the Old Age Security pension is your only source of viable income, as long as your finances are in order and you’re able to make your loan payments on time and in full, you should be able to find an alternative lender willing to lend to you. 

Can I get a guarantor loan while on OAS?

A guarantor loan can be a great option when looking for a loan while on OAS. These loans are reserved for borrowers who don’t qualify with conventional lenders (banks or credit unions, etc.) because of their bad credit or in this case unconventional income. Getting a co-signer with strong credit and financial health can help you qualify for a loan as they greatly reduce the risk for the lender. 
Bryan Daly avatar on Loans Canada
Bryan Daly

Bryan is a graduate of Dawson College and Concordia University. He has been writing for Loans Canada for five years, covering all things related to personal finance, and aims to pursue the craft of professional writing for many years to come. In his spare time, he maintains a passion for editing, writing screenplays, staying fit, and travelling the world in search of the coolest sights our planet has to offer.

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