Canada refugee claimants deserve recognition. Imagine having to flee your home country for fear of persecution and move to a new destination where everything is different, including the language. Furthermore, you might not have family, friends, or a community to support you.
However, refugees need help settling into their new home, and many times this involves financial assistance. Fortunately, Canada’s financial programs for government-assisted refugees give some support, but ultimately, refugees need to learn how to access credit in Canada in order to finance their future needs.
Read on to discover loans and credit products available to help refugees cover some of the cost of life’s biggest expenses and build credit scores and financial history in Canada.
Key Points:
- It’s easier for refugees to first become permanent residents when applying for loans in Canada.
- Loans can help refugees build credit and cover necessities like clothes, food, and other expenses.
- Secured credit cards are often easier for refugees to get and can help establish credit history.
- Government programs like ILP and RAP provide financial support and assistance for resettlement.
Can You Get A Loan As A Refugee?
In Canada, you could get a loan as a refugee; however, your options will be very limited. The federal government has certain programs to help refugees resettle from abroad to cover costs like transportation and initial settlement expenses.
Traditional banks typically require permanent resident status, stable income, and Canadian credit history, so refugees usually do not qualify for standard bank loans until they obtain PR and begin building credit.
On the other hand, private lenders are willing to consider applications based on income, a co-signer, or collateral, even without PR or established credit. However, these loans often come with higher interest rates, and approval is unlikely without some ability to demonstrate repayment capacity.
Get An Affordable Loan Here
| How To Become A Permanent Resident Refugees can apply for permanent residence status and apply to become Canadian citizens. If the Immigration and Refugee Board of Canada (IRB) accepts your claim for refugee protection, you’ll receive a letter that you can use to prove your status. If you resettled as a refugee in Canada as a protected person chosen from abroad, you’ll receive a “Confirmation of Permanent Residence” document, then eventually a Permanent Resident Card. At this point, it’s possible to apply for a personal loan in Canada |
Types Of Loans You Can Get As A Refugee
Once you obtain permanent residency, you may be able to access any of the following loan types in Canada:
Personal Loans
Personal loans are one of the most common forms of credit that refugees can access once they have a PR card. These loans can be used for a range of purposes, from paying for household essentials to funding small business ventures.
Approval for a personal loan typically requires proof of income, identification, and a Canadian bank account. For refugees without an employment history, lenders may accept alternative income documentation, such as government benefits or financial support from sponsorship programs.
Personal loans are available as either secured or unsecured loans, with secured loans requiring collateral to reduce risk for the lender.
Learn more: Personal Loans
Where Can You Get A Personal Loan?
Filters
- Amount
- Up to $35,000
- Rate
- 9.99% – 34.95%
- Term
- 6 – 84 Months
- Amount
- Up to $60,000†
- Rate
- 19.99% – 34.99%*
- Term
- 6 – 120 months
- Amount
- $500 – $10,000
- Rate
- Up to 34.99%
- Term
- Up to 60 months
Student Loans
Refugees with PR status can also access student loans to pursue post-secondary education, such as Windmill Microlending. Student loans can cover tuition fees, textbooks, and living expenses while studying in Canada.
Like other Canadians, refugees must show proof of enrollment in an approved school. Provincial or federal student loan programs provide the funds, and repayment typically starts after graduation. Student loans not only make education affordable, but also help newcomers establish a positive credit history if managed responsibly.
Credit Cards
Most credit card companies simply require you to be a resident of the province you live in.
That said, it may be difficult to get approved for an unsecured credit card since you likely have no credit history and a low income. In this case, you may have better luck applying for a secured card instead. These cards are easier to get approved for and can help you build credit in Canada.
| 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 |
Car Loans
Transportation is often essential for refugees to access work, school, and services in their new communities. Car loans can help you purchase a vehicle, and usually requires a driver’s license, proof of income, and identification. Lenders may also ask for a social insurance number (SIN) and bank statements.
Car loans are typically secured by the vehicle itself, which helps new borrowers qualify even if without an extensive credit history.
| What’s The Difference Between A Refugee And An Immigrant? The terms “refugee” and “immigrant” may sometimes be used interchangeably, but they are not the same. An immigrant is someone who decides to move to another country and settle there permanently. A refugee, on the other hand, is someone who is forced to flee their country due to fear of persecution and/or threat to their lives. |
Government Loans And Financial Assistance For Refugees
As one can expect, there are several challenges to being a newcomer in Canada as a refugee. In addition to the difficulties that come with learning a new language and adjusting to a different culture, financial challenges can pose additional roadblocks to resettlement.
Thankfully, there are some financial assistance programs that the Canadian government provides to refugees to help ease the burden of settling in a new country.
Immigration Loans Program (ILP)
The Immigration Loans Program (ILP) provides funding to refugees adjusting to resettlement in Canada. These loans can cover expenses such as travel to Canada and other resettlement costs. More specifically, the following types of loans are available under the ILP:
- Transportation loans to help cover transportation costs
- Assistance loans to help with establishing residence in Canada
- Right of permanent residence fee (RPRF) loans
Resettlement Assistance Program (RAP)
The Resettlement Assistance Program (RAP) is a contribution program that consists of income support and assistance for many essential services provided by Service Provider Organizations (SPOs), usually within the first few weeks of arrival in Canada.
Other Programs That May Provide Refugees With Assistance In Canada
To help ease the transition to Canada and assistance with immediate needs, many community organizations, charities, and government-supported programs provide essential support services at little or no cost. A great way to find local resources is to use www.211.ca, a free online service.
Here are a few programs refugees may be able to find in Canada:
Food Banks
Food banks across Canada provide free groceries to individuals and families experiencing food insecurity. Refugees can access food banks through local community centres, settlement agencies, or charitable organizations. Most food banks require basic identification or proof of address, but many are flexible for newcomers.
Learn more: How To Find Food Banks In Canada
Emergency Shelters
Emergency shelters offer temporary housing for refugees who arrive without a permanent place to stay. These shelters provide a safe environment, meals, and basic necessities. Refugee-specific shelters or newcomer housing programs may be available in bigger cities.
Rent Assistance
Rent assistance programs help refugees afford housing while they find work and gain an income. These programs are often provided through provincial social services, nonprofit housing agencies, or refugee settlement organizations.
Utility Assistance
Utility assistance programs help refugees manage essential services such as electricity, heating, and water. Support may include emergency bill payments, payment plans, or energy assistance programs offered by utility companies or local governments.
Free Clothing And Household Items
Many charities and community centres provide free or low-cost clothing, winter clothing, furniture, and household items to refugees. These programs are especially helpful during colder months or when families are setting up a new home.
Final Thoughts
Canada refugees can have a difficult time getting access to credit when they first move to Canada. However, there are programs and products available that can help them. Canada’s refugees are eligible for credit and loans which buy life’s necessities and simultaneously build a healthy credit history.
Loans For Refugees FAQs
What is a credit score?
Do you have to renew your permanent resident card in Canada?
How do you build credit in Canada as a refugee?
What documents do I need to apply for a loan as a refugee?
- Original copy of a government-issued photo identification. Such as a driver’s license or Permanent Resident Card.
- Verification of employment, such as recent pay stub, letter of employment, or tax statements.
®Fairstone Financial Inc. is a wholly owned subsidiary of Fairstone Bank of Canada.
*Interest rates are subject to change. Actual Annual Percentage Rate (APR) varies based on the province of residence and individual factors like credit details and loan amount. The interest rate on an unsecured personal loan is 31.99% in BC.
†On approved credit. Terms and conditions apply. Interest rates vary by province/territory and from customer to customer based on factors like credit score and borrowing history. See Fairstone’s website for details.
Fairstone Financial Inc. holds high-cost credit licenses in AB, MB (License #85047, expiring 20-02-2026) and QC; it has applied for a high-cost credit grantor license in NL. For license information by province, visit Fairstone.ca/HCCG
In Ontario, Fairstone Financial Inc. is licensed as mortgage brokerage 10821.
In Nova Scotia, Fairstone Financial Inc. is licensed as mortgage lender #2021-3000028.
