While Canada is a land of great opportunity for many newcomers, there are many challenges. As a new immigrant, you have to re-establish yourself. You might need to navigate college or university systems, find a job, find a home, apply for any relevant social support, and start building your credit.
Unfortunately, settling in Canada isn’t cheap, and sometimes you’ll need to borrow money. But are there loans for immigrants in Canada?
Key Points To Remember
- Newcomers may be able to access a variety of different loan products, including personal loans, auto loans and mortgages. New permanent residents in Canada are eligible to apply for virtually any type of loan, though this doesn’t mean they’ll qualify or that all products are available.
- Many banks offer packages specially designed for newcomers; however, you will need to meet certain requirements to qualify.
- Newcomers who are unable to get financing through a bank can opt for loans from private lenders. These are generally easier to qualify for, though they may be more expensive.
- You can strengthen your chances of approval by gradually building your credit profile, securing steady employment, and increasing your overall financial stability.
Can You Get A Loan As A Newcomer In Canada?
Newcomers in Canada can qualify for loans, but approval isn’t always straightforward. Your ability to borrow will depend on factors like your residency status, income stability, and overall financial profile.
Lenders in Canada typically look for strong credit, steady earnings, and manageable debt levels before offering their best loan rates and terms.
| Why Is It Difficult For Newcomers To Get Loans? Even if you earn a solid income and keep your debts low, you may still run into obstacles simply because you don’t yet have a Canadian credit record. Credit scores don’t transfer from other countries, so immigrants must begin building their credit history from the ground up once they arrive. The upside is that establishing new credit is usually far easier than repairing damaged credit. And if you’re a permanent resident, there are plenty of lenders and programs designed specifically to support newcomers as they settle in. If you’re unsure whether you have a credit score in Canada, you can check yours for free using Loans Canada’s Compare Hub. |
What Types Of Loans Can You Get As A Newcomer In Canada?
As a newcomer to Canada, you can access any type of loan so long as you meet the lender’s criteria. This may include income, debt, and credit requirements.
Personal Loans For Newcomers In Canada
A personal loan provides funds that are repaid in installment payments over a specific term. Loan amounts range from $100 to $50,000, with terms between 6 months and 5 years. The loan may come with either a fixed or variable interest rate, and the funds can be used for just about any purpose, including the cost of advancing one’s career.
Secured Vs Unsecured Personal Loans
Understanding the difference between secured and unsecured loans can help you choose the right option when borrowing for the first time in Canada:
| Unsecured Loans | Unsecured loans don’t require collateral, meaning you don’t need to pledge an asset like a car or savings account. Personal loans, lines of credit, and credit cards are common unsecured options. While convenient, these loans usually come with higher interest rates, especially for newcomers without established credit. |
| Secured Loans | Secured loans are backed by collateral, such as: – A vehicle (car loans) – A home (mortgages) – A cash deposit (secured credit cards) Because collateral reduces the lender’s risk, secured loans often have lower interest rates and higher approval odds, making them a practical choice for newcomers trying to access affordable credit. |
Borrow Up To $50,000
Lines Of Credit For Newcomers In Canada
A line of credit is a type of financing that allows you to borrow money up to a certain limit, similar to a credit card. There is no set payment schedule, and you’re only charged interest on the funds withdrawn from the credit line.
However, you must make interest payments on the amount you borrow each month. Like personal loans, the money obtained through lines of credit can be used for a variety of purposes.
Credit Cards
As a newcomer, a credit card can provide you with financial flexibility and the ability to build credit. However, getting approved for a credit card can be difficult as many require good to excellent credit.
However, many banks offer programs to newcomers that include credit cards. You can also apply for secured credit cards or credit cards with low-income or no credit criteria.
Learn more: Best Credit Card For Newcomers In Canada
Mortgages
If you need financial assistance to help pay for housing, a mortgage can help. Mortgages are specifically designed to cover the cost of buying a home. These loans are backed by the property. With a mortgage, you’ll make installment payments over a specific loan term until the loan amount — plus interest — is fully repaid.
Amortization periods can be as long as 25 or 30 years, but tend to come with lower interest rates compared to unsecured personal loans because of the collateral involved. Many lenders and banks offer mortgages that are specially designed for newcomers.
Learn more: Mortgages For Newcomers In Canada
Car Loans
Car loans are designed to help pay for the purchase of a vehicle. These loans are secured by the vehicle and are repaid with installment payments over a set period. You can get a car loan from a bank, private lender, or from the car dealer’s in-house financing.
Car loans can be used to finance both new and used vehicles, though rates tend to be lower for new vehicle financing.
Learn more: A Guide To Car Loans For Newcomers To Canada
Where Can You Get A Loan As A Newcomer In Canada?
There are many sources and types of loans you can access as a newcomer in Canada. From the government to banks to alternative lenders, the possibilities are endless.
Windmill Microlending
Windmill Microlending is a Canadian charity that provides affordable loans to skilled immigrants and refugees. The company has helped thousands of newcomers to Canada over the years cover the costs of accreditation and career development.
Those with specific skills, training, and education who are new to Canada may find it difficult to advance their careers due to financial hurdles. With Windmill Microlending’s low-interest microloans, underemployed immigrants can access credit despite their low income or lack of credit history in Canada.
What Does Windmill Microlending Offer?
Windmill Microlending offers small loans of up to $15,000. Windmill microloans have a fixed rate that won’t change over the duration of the term. Windmill Microlending also provides the following:
- Career path coaching
- Mentorship
- Budgeting tools
- Financial planning advice
- Career development resources
You can use the money for numerous purposes, including qualifying examinations, assessments, training, educational materials, living allowance, relocation expenses and professional association fees.
Banks
In Canada, you generally need good credit and healthy finances to access loans from banks. However, some banks offer specialized loan offers for newcomers. Instead of credit requirements, they may have strict income and employment requirements. They may also require collateral as security or a higher down payment for car loans or mortgages.
Private Lenders
Private lenders offer loans without as strict criteria requirements as banks normally have. For instance, in exchange for a lower income or credit score, private lenders charge higher interest to make up for it.
Moreover, unlike banks, many alternative lenders will offer loans to newcomers who have an alternative source of income, such as self-employment income, pension, or government benefits such as Canada Child Benefit (CCB), employment insurance (EI) and disability benefits.
Learn more: Private Loans
Where Can You Get Loans As A Newcomer?
Are There Government Loans For New Immigrants In Canada?
The federal government of Canada offers loans to immigrants through their Immigration Loans Program (ILP). Specifically, this program provides immigrants with three kinds of loans:
Transportation Loans For Immigrants In Canada
This type of loan is meant to cover the costs associated with transportation for immigrants and their families from their home country to Canada. This may include the cost of travel to Canada, transportation tax and any IOM (International Organization for Migration) service fees.
New immigrants must book their travel with the assistance of the IOM to be eligible for this loan.
Assistance Loans For Immigrants In Canada
The assistance loan is meant to help immigrants cover the costs of initial resettlement, like basic needs and employment costs. It can help cover basic needs such as rent, utilities, food, clothing and household items.
Right Of Permanent Residence Fee (RPRF) Loans
The RPRF loan is meant to assist immigrants in covering the cost of RPRF when looking seeking permanent residence. For more information about RPRF loans, visit the Canadian government’s RPRF webpage.
How To Qualify For Loans As A Newcomer To Canada
Whether you’re looking to apply for a personal loan, car loan or mortgage, there are certain factors lenders look at when determining your creditworthiness. While banks may focus more on your credit score, private lenders base their approval on your overall financial health. Some things private lenders assess include the following:
- Income
- Debt level
- Job stability
- Assets
| Do You Need To Be A Permanent Resident To Get A Loan? Not necessarily. Many lenders lend to temporary residents, including work permit holders and study permit holders. |
How To Apply For A Loan As A Newcomer
To apply for a loan as a newcomer in Canada, follow these steps:
Step 1: Determine Your Loan Needs
Before applying, identify why you need the loan and how much money you require. For example, are you looking for a personal loan to cover living expenses, or do you need a car loan, mortgage, or line of credit?
Knowing the purpose of the loan will help you choose the right product and lender.
Step 2: Check Your Eligibility
Most lenders require that you are either a permanent resident or Canadian citizen. Some private lenders may also consider applicants with valid work or study permits if you have stable income.
Make sure your immigration documents are up-to-date, and check the minimum income requirements for the loan type you’re applying for.
Step 3: Gather Necessary Documents
Lenders typically ask for documents to assess your financial situation. Prepare the following:
- Photo ID: PR card, passport, or work/study permit.
- Proof of income: Pay stubs, employment letter, tax returns.
- Proof of address: Utility bills, lease agreements.
- Bank statements: To show account activity and savings.
Step 4: Check Your Credit Score
Your Canadian credit history is a key factor lenders look at. As a newcomer, you may have little or no credit history, which can affect your approval.
Use free tools like Loans Canada’s Compare Hub to check your credit score. If your credit is limited, consider secured credit cards, credit-builder loans, or rent-reporting services to start building your history.
Step 5: Compare Lenders
Be sure to compare multiple lenders to find the best interest rates, fees, and terms. Using a loan comparison platform like Loans Canada can save you time and prevent multiple credit inquiries.
Step 6: Submit Your Application
Once you’ve selected a lender, fill out the loan application and provide all requested documentation.
Step 7: Get Funded
Funds are usually deposited into your bank account within a few business days with banks, and even on the same day with online lenders.
How To Get A Loan As A Newcomer: Build Your Credit With Credit Building Products
One of the best ways to qualify for loans as an immigrant is to build your credit. There are many types of credit-building products to help new immigrants build their credit in Canada. Let’s take a look:
Secured Credit Cards
Unlike traditional credit cards, secured credit cards have security deposits to back them up. If the borrower cannot pay their bill, the security deposit covers the credit used. These credit cards are a popular choice for newcomers to Canada. The security deposit gives creditors more comfort given the lack of credit history.
If you’re looking to start building your Canadian credit history, finding a secured credit card that meets your needs should be your first step. Once you have your card, use it to purchase important necessities like groceries or set up a recurring bill payment.
| Pro Tip: Our number one piece of advice is to make sure the credit card provider reports your payment to the credit bureaus, this is how you will build your credit history. |
| Annual Fee | Purchase Interest Rates | Min. Deposit | |
 Secured Neo Mastercard | $7.99/monthly (can be waived) | – 19.99% – 29.99% – QC: 19.99% – 24.99% | $50 |
 Secured Tims® Mastercard | $0 | – 20.99% – 26.99% – QC: 20.99% – 24.99% | $50 |
 Home Trust Secured Visa Card | 0$ or $59 | – 19.99% (no annual fee) – 14.90% (with annual fee) | $500 |
 Vancity enviro™ Secured Visa* card | $0 – $395 | 11.25% or 19.50 % | $500 |
Credit Builder Products
Canadians have access to a wide range of digital tools designed to help build and improve credit. From credit building apps to rent reporting services, these tools offer valuable features to track, manage, and strengthen credit. Let’s explore some of the top options, how they work, and where you can find them.
| Product | Cost | Features | ||
| Nyble | Credit building line of credit | Optional $11.99/ month membership fee | – Reports to Equifax – Access up to $250 | Learn More |
| KOHO Credit Building | Credit building line of credit | – Up to $14.75/ month | – Reports to Equifax – Secured and unsecured options | Learn More |
| Kikoff | Credit builder | Starting at $10/ month | – Reports to Equifax | Learn More |
| Spring Financial – The Foundation | Credit building program | ~$74/bi-weekly | – Reports to Equifax and TransUnion – You save $750 | Learn More |
| Chexy | Rent reporting for credit building | No monthly fee (only credit card processing fees apply) | – Reports rent payments to Equifax | Learn More |
Newcomer Programs From Banks In Canada
Many banks in Canada offer newcomers programs designed to help immigrants access credit, including the following.
CIBC Banking Solutions For Newcomers
The CIBC Newcomers Program provides several deals on banking products. Newcomers can get the CIBC Smart™ Account with no monthly fee for 2 years. Similarly, they offer global money transfers with $0 transfer fees.
TD Banking Solutions for Newcomers
TD offers a variety of programs designed to help newcomers settle into their Canadian financial life, including chequing accounts with no fees for 12 months, flexible mortgages for individuals with no credit history, secured credit cards, and more.
RBC Newcomers Advantage
RBC offers a variety of products for newcomers to Canada. Including car loans and mortgages with no credit history required. Preferred interest rates for investments, no fees for chequing accounts, and free international money transfers (for a limited time).
Final Thoughts
Finding a loan as a new immigrant in Canada is a challenging task. For a variety of reasons, including risk and credit history, most Canadian lenders prefer applicants to have a permanent residency.
That being said, many options are offered by the federal government, banks, and private lenders to help establish their credit and access loans.
