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 an unemployment loan on government benefits, like 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.
Best Payday Lenders That Accept Government Benefits
There are plenty of payday lenders out there that provide short-term loans that accept alternative sources of income, including government benefits, like social assistance, disability benefits, and pensions.
Here is a list of payday lenders that accept alternative sources of income:
- Amount
- $300 – $35,000
- Rate
- 9.99% – 34.95%
- Term
- 6 – 84 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
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.
| Government Benefits Lenders May Accept Employment Insurance (EI) |
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)?
It may be possible to get a loan while on OAS or CPP benefits. 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.
Can You Get a Payday Loan With Guaranteed Income Supplement (GIS)?
Yes, some payday lenders in Canada accept Guaranteed Income Supplement payments as a valid source of income, as long as the deposits are made on a regular basis and are enough to cover loan payments. You’ll still need an active bank account and proof of regular income to qualify. GIS payments are a fixed, low‑income benefit, so it’s important to be cautious, as payday loans come with high fees and can be difficult to repay on a limited budget.
Can You Get a Payday Loan On Social Assistance?
Yes, some payday lenders offer payday loans that accept social assistance in Canada as a valid source of income, as long as it is deposited regularly. Approval still depends on meeting the lender’s minimum income and banking requirements. Again, borrowers should be cautious though, because payday loans can be expensive and may create a cycle of debt for people on limited incomes.
Can You Get a Payday Loan With Ontario Disability Support Program (ODSP)?
Many payday lenders will consider ODSP payments as eligible income, provided the deposits are consistent and meet the lender’s minimum threshold. You’ll still need an active bank account and proof of income to qualify. Because ODSP is fixed and limited, taking on high‑cost credit can be risky, so it’s important to review alternatives before borrowing.
Learn more: How To Get A Loan On ODSP?
Can You Get a Payday Loan With Private Pension Plans?
Yes, private pension income is often accepted by payday lenders as long as the payments are predictable and deposited into your bank account. Lenders typically look for steady monthly income rather than employment specifically.
Note: Payday loans are extremely expensive and can lead to a cycle of debt if you’re unable to repay the full amount borrowed. Learn more about the payday loan laws in your province before applying.
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.
What Are The Eligibility Requirements?
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)
How Much Can I Get While On Government Benefits?
Payday loan amounts typically max out at $1,500. That said, the most you can qualify for depends on your income, so it’s possible that you qualify for less. In some provinces, like Ontario and BC, you may be accepted for no more than 50% of your net pay.
Other loan types may offer higher loan amounts, like personal installment loans. But again, the amount you can qualify for depends on how much you collect on your government benefits. Because government benefits are fixed, lenders typically approve lower limits to ensure repayment fits your budget.
Can I Get Same Day Funding While On Government Benefits?
Yes, many payday lenders in Canada do offer same‑day funding to borrowers receiving government benefits. Most online lenders use e‑Transfer to send funds within minutes or hours after approval, making it possible to access money the same day even without employment income.
Here’s How Much A Payday Loan Will Cost You
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 |
Before You Apply, Consider These Risks
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.
Other Loan Options You May Qualify For
If you’re struggling to qualify for traditional financing, consider these options:
Cash Advance Apps
- Bree: Bree provides small cash advances up to $750 within minutes through a simple online application. The service doesn’t require a credit check, charges no interest, and avoids late fees, making it a lower-cost alternative to traditional short‑term loans. You can also apply without traditional income sources, as long as you can repay the advance.
- KOHO Cover: KOHO Cover is a cash advance app that allows you to access up to $250 in short‑term funds with no interest and no credit check. It’s available to KOHO subscribers and can be available to those on social assistance.
Small Lines Of Credit
- Nyble: Nyble gives users fast access to as much as $250 without a credit check. You can apply while on government benefits, and even build your credit score, as your positive payment history is reported to the credit bureau.
- MoneyUp: MoneyUp’s FastForward feature offers an instant credit line of up to $1,000, letting Canadians access part of their upcoming government benefits without going through a loan application.
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. Just remember 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.
