How To Get Approved For A Personal Loan On ODSP

According to a report by the Ontario government, there were 492,590 Ontario Disability Support Program (ODSP) beneficiaries in January 2023. That represents 364,812 cases.

The maximum monthly ODSP payment amount is $1,228. It includes a shelter allowance and a basic needs amount.

Meaning most ODSP recipients, which can include families with dependent children, were living on a fairly meagre income. Given that approximately half a million Ontarians depend on ODSP, it is likely that some individuals may run into unexpected expenses, particularly ones surrounding their disability.

These expenses can be more than what they can afford on ODSP. As such, many may look towards personal loans, but can you get a loan while on ODSP?

Where Can You Get An ODSP Loan?

	Loan Amount	Interest Rate	Term	Provinces Available
Loans Canada	Up to $50,000	Prime to 46.96%	3 - 60 months	Across Canada	Learn More
CashMoney	Up to $1,500	Varies by province*	Up to 62 days	BC, AB, ON	Learn More
iCash	Up to $1,500	Varies by province*	Max 62 days	BC, AB, MB, ON, NB, NS, PEI	Learn More
Magical Credit	Up to $20,000	19.99% - 46.8%	12 - 60 months	BC, AB, ON, NB, NS, PEI, NL	Learn More
GoDay	Up to $1,500	Varies by province*	Max 62 days	BC, AB, SK, MB, ON, NB, NS, PEI	Learn More
Spring Financial	$500 - $35,000	9.99% - 46.99%	9 - 60 months	BC, AB, SK, MB, ON, NB, NS, PEI, NL	Learn More

Types Of Loans You Can Get While On ODSP

You can get both a payday loan and a personal loan while on ODSP. However, you’ll need to find a payday lender or a personal loan lender who accepts non-traditional forms of income. Non-traditional forms of income include EI, ODSP, CPP, CCB, OAS and other incomes that come from government benefits and assistance programs.

Personal Loans For ODSP

To qualify for a personal loan while on ODSP, you’ll need to find a personal loan lender in Ontario who accepts Ontario disability benefits as a source of income. ODSP personal loans typically offer higher loan amounts and better terms than payday lenders. They also charge lower rates, but in comparison to other personal loan lenders, their loan terms tend to be more costly.  

ODSP PERSONAL LOAN PROS

• Higher Loan Amounts – Depending on the lender you choose, you could qualify for an ODSP personal loan of $10,000. However, the amount depends on the lender and how your financial situation.
• Lower Interest Rates – Lenders legally cannot charge more than 60%. 
• Longer Terms – Lenders typically offer terms that can be as short as 6 months and as long as 5 years.  

ODSP PERSONAL LOAN CONS

• Requires Credit Checks – Generally, when you apply for an ODSP personal loan, you’ll need to meet the lender’s minimum credit score requirement. As such, it’s important to check your credit score before applying for a loan. Thankfully, you can check your credit score for free using Compare Hub.
• Fees – Many personal loans lenders will charge fees such as loan origination fees, administrative fees and fees for late or extra payments.

Payday Loans For ODSP

There are hundreds if not thousands of payday lenders in Canada who offer short-term loans up to $1,500 to those on ODSP. In order to qualify for an ODSP payday loan, you’ll need to find a lender who will accept your Ontario disability benefits as a source of income.

ODSP PAYDAY LOAN PROS 

• Fast Funding – If you’re in need of cash quickly, you can get a payday loan while on ODSP within a few hours to a day. 
• E-tranfsers – Some ODSP payday lenders will fund you the money via Interac e-transfer for faster funding.
• Accepts Any Credit – If you have bad credit, you can still qualify for a ODSP payday loan. Some lenders don’t require credit checks, you only have to show proof of income.

ODSP PAYDAY LOAN CONS

• Short Terms – One of the main caveats to payday loans are it’s extremely short terms. The payback period for the loan and interest is within 30 days or less. It depends on when you get paid.
• Small Loan Amount – Unfortunately with ODSP payday loans, you can only qualify for a maximum of $1,000 to $1,500 depending on the lender. Moreover, lenders will not lend more than 50% of your income after taxes. 
• Costly – Payday loans have notoriously high annual percentage rates (APR) and worse annual percentage yield (APY) rates. These interest rates easily range between 300% to 600% cumulatively. When borrowing from a payday lender, it’s important to make sure you can actually afford it or else risk getting caught in a payday loan cycle.

What Are The Requirements To Qualify For An ODSP Loan

Approving a consumer for a loan is all about assessing risk and verifying whether the potential borrower can, in fact, afford to make loan payments on top of all their other financial requirements. An ODSP income won’t be the reason you get rejected. Your overall financial picture is more important.

People with high-paying 9-5 jobs get rejected for loans all the time for a wide variety of reasons. All lenders are different and have their own set of requirements when it comes to approving anyone for a loan. Here are some things a lenders will evaluate when approving you for a loan:

Loan Requirements For ODSP 

When applying for an ODSP personal loan or an ODSP payday loan, you’ll need to provide certain personal and financial information, including: 

• Personal Information: You’ll need to provide your name, address, date of birth, and contact information. 
• Financial Information: You’ll need to provide information about your income, debt, and credit. 

Documents Required For An ODSP Loan

• Government Issued ID – In order to prove your identity and address, your lender will likely ask you for a photo identification.
• Proof of Income – Income is the key factor in determining your eligibility for the loan. Lenders need to verify how much income you have and if it is consistent.
• Bank statements – Lenders typically require your bank statements to assess your level of debt. If half your income is going to other debts and the other half to rent, they may not want to rent to you as you’d likely be unable to repay it.

How To Improve Your Chances Of Getting Approved For A Loan While On ODSP

When your income is coming from ODSP, it means you’re in a unique financial situation. This can sometimes make the loans application and approval processes a bit more complicated.

People who apply for personal loans often need the money as soon as possible. There are a few steps to make the process as quick and smooth as possible. These steps can increase the chances of your loan getting approved.

Make Sure Your Debt-To-Income Ratio Is Low

If you already hold too much debt then getting another loan can be difficult. That goes for anyone regardless of their income. If you need to take out an auto loan or cover the cost of repairs to your home, etc. make sure your others debts, for example, credit card debt, are under control.

Lenders look at your debt-to-income ratio. It is a proportion of how much you owe others versus how much you earn. The higher your debt-to-income ratio, the less likely a lender will approve your new loan.

Consider Getting a Co-signer

While this may not be an option for many potential borrowers, getting a trusted friend or family member to co-sign for your loan is a great way to increase your chances of getting the financing you need.

Apply for a Guarantor Loan  

A guarantor loan also involves finding a co-signer, but is mainly reserved for borrowers who have bad credit. When you apply, your co-signer’s credit and finances will be under the microscope, rather than your own. Once approved, you should receive a loan and interest rate, both of which will vary depending on your cosigner’s financial strength. As you’re still primarily responsible for your loan payments, you should see a credit score boost whenever you make a payment on time and in full, even if your credit report wasn’t examined initially.

It’s important here to be aware of the consequences for not honouring your loan agreement. Not only will you be subject to penalties and interest rate hikes when you start missing payments, but your cosigner will be obligated to pay the balance owed should you go into default (when you can’t afford your payments at all). This could potentially cause severe debt for both parties involved.

Click here if you’re still trying to decide if a guarantor loan is the right option for you. 

Shop Around

If you have specific loan needs or are in a unique financial situation, it is, without a doubt, in your best interest to shop around for the best deal and the best lender. Do your research before you settle on a loan or a lender and always make sure the lender you’ve chosen is legitimate, like Mogo.

Find the Right Lender

One of our top pieces of advice for anyone with specific financial needs who are looking to get approved for a personal loan is to find the right lender to work with. This will make all the difference. Some lenders have stricter requirements, some only lend to certain categories of consumers, and some pull credit. Find a lender that fits your needs and you’ll be even closer to getting approved for the loan you want. 

Additional Reading

No Employment Verification Loans

How To Get Free Money In Canada

What Is The Ontario Disability Support Program (ODSP)? 

The Ontario Disability Support Program offers both financial and employment support for adults with disabilities living in the province, who require the assistance and who meet the qualifications. Individuals under the program can access up to $1,169 to $1,887 depending on a number of variables including shelter type, number of dependents, and if you have a spouse. While the program does provide support for countless Ontarians, in certain situations, it is difficult for some recipients to make enough money each month to afford basic life necessities, let alone cover the cost of an unexpected expense.

Can You Get A Loan While On ODSP? 

It is possible to apply for and get approved for a personal loan when your income is coming from ODSP. But, it’s also important to keep in mind that all lenders are different and that it may take more time or require a bit more work on your end.

Good Reasons To Take Out A Loan While On ODSP

The amount of money an individual receives each month while on ODSP depends on many different factors, including but not limited to how much they pay for shelter each month, the number of family members, and the age of their family members. This can often leave some ODSP recipients needing extra financial help to cover the cost of “extra” or unexpected expenses. Here are a few good reasons to take out a loan while on ODSP.

• To Finance a Vehicle – When you live in Ontario, the chances of needing some type of vehicle to get around are very high. Almost all Canadians, regardless of their income status, need a loan in order to afford a vehicle, being on ODSP is no exception.
• To Handle A Medical Emergency – Dealing with any medical expense, emergency or not, can be very expensive. Getting approved for the loan you need is often the difference between getting the help you need and going without.
• To Cover an Unexpected Expense – Life happens and more often than not it’s very expensive. Getting an affordable loan to help cover those costs is often the only option for many consumers.
• For a Large Purchase – A loan is one of the best financing options for those items that you can’t afford to pay for this cash.
• To Pay for Repairs – Often repairs pop up out of nowhere. Whether they’re for your house or your vehicle, if you need to get something fixed as soon as possible, an affordable installment loan is a great option.

Loans For ODSP FAQs

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