Loans For Refugees In Canada

Loans For Refugees In Canada

Written by Lisa Rennie
Fact-checked by Caitlin Wood
Last Updated August 2, 2022

Imagine having to flee your home country for fear of persecution and move to a new destination where everything is different, including the language. This is what refugees experience, and oftentimes, they leave everything they own behind and are forced to start afresh in their new country.

As one would expect, refugees often need help getting settled into their new home, and many times this involves financial assistance. Fortunately, the Canadian government offers some financial assistance programs, but ultimately, refugees will need to learn how to access credit in Canada in order to finance their future needs.

Loans and credit products will help refugees not only build credit but cover the cost of some of life’s biggest expenses, like a house or vehicle.

Can You Get A Loan As A Refugee?

In order to get a loan in Canada as a refugee, you need to become a permanent resident. Non-residents are not eligible for loans in Canada. There are several requirements to be eligible for a loan, and being a permanent resident or Canadian citizen is one of them.

Refugees must resettle in Canada in order to become eligible to get a personal loan. In order to come to Canada, refugees must be referred by either the United Nations Refugee Agency (UNHCR) or a private sponsorship group. A person can’t apply directly to Canada for resettlement. 

How To Become A Permanent Resident? 

People who are considered refugees may 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.

Where Can You Get A Personal Loan? 

Filters

Loans Canada

Amount
Up to $50,000
Rate
2.00% to 46.96%
Term
3-60 months

Loanz

Amount
$1,000 - $15,000
Rate
29.9% - 46.9% APR
Term
12 - 60 months

Symple Loans

Amount
$5,000 - $50,000
Rate
6.99% - 22.99%
Term
Up to 84 Months

Spring Financial

Amount
Up to $15,000
Rate
14.99% to 46.96%
Term
6 - 12 Months

goPeer

Amount
$1,000 - $25,000
Rate
7.5% - 31.5%
Term
36 - 60 months

Cash Money

Amount
$1,500 – $10,000
Rate
Varies by province
Term
Varies by product (up to 60 months)

Lendful

Amount
$5,000 - $35,000
Rate
Starting at 9.99%
Term
6 - 60 Months

LendDirect

Amount
Up to $15,000
Rate
19.99% - 46.93%
Term
No minimum term

Loan Away

Amount
Up to $5,000
Rate
19.9% to 45.9%
Term
6 - 36 Months

LoanMeNow

Amount
$500 - $1000+
Rate
28 to 32%
Term
3 Months

Consumer Capital Canada

Amount
$500 - $12,500
Rate
19.99% to 34.99%
Term
No minimum term

Mogo Finance

Amount
$300 – $35,000
Rate
9.9% - 47.72%
Term
3 - 60 Months

Fairstone Financial

Amount
Up to $50,000
Rate
19.99% - 39.99%
Term
6 - 120 Months

How To Get Your Permanent Resident Card (PR Card) As A Refugee? 

A permanent resident is someone who has been given a permanent resident status but is not a Canadian citizen status. A Permanent Resident Card validates a person’s status in Canada and allows them to have access to certain resources. 

If you’re recognized as a Protected Person or a Protected Temporary Resident by the IRB or Immigration, Refugees and Citizenship Canada (IRCC), you may apply for permanent residence.

Sponsored refugees are not required to apply for a Permanent Resident Card when they first arrive in Canada. The card will automatically be sent to the address listed as their residence in Canada. 

Are you a foreign worker? Find out what are your rights and responsibilities as a temporary foreign worker in Canada.

What Is 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.

Documentation Required For Different Loan Types

Loan TypeTypical Required Documents
Personal Loan- Name, date of birth, contact information
- 1 or 2 government-issued IDs (1 photo)
- Social Insurance Number (SIN)
- Proof of employment (income, employers name, job title)
- Loan purpose
- 3 months' worth of bank statements
- Bank account details (for direct deposit and withdrawal of payments)
Payday Loan- Name, date of birth, contact information
- 1 or 2 government-issued IDs (1 photo)
- Proof of income (bank statements, paystub, benefits information)
- Bank account details (for direct deposit and withdrawal of payments)
Car Loan- Name, date of birth, contact information
- Driver’s license
- Social Insurance Number (SIN)
- Proof of employment (income, employers name, job title)
- 3 months' worth of bank statements
- Bank account details (for direct deposit and withdrawal of payments)
- Proof of insurance
- Vehicle identification number
Vehicle Title Loan- Name, date of birth, contact information
- 1 or 2 government-issued IDs (1 photo)
- Proof of employment (income, employer's name, job title)
- 3 months' worth of bank statements
- Bank account details (for direct deposit and withdrawal of payments)
- Car title
- Vehicle identification number
- Vehicle details (make, model, age, etc.)
Home Equity Loan- Name, date of birth, contact information
- 1 or 2 government-issued IDs (1 photo)
- Social Insurance Number (SIN)
- Proof of employment (income, employers name, job title)
- Bank account details (for direct deposit and withdrawal of payments)
- 3 months' worth of bank statements
- Property’s deed
- Recent mortgage statements
- Most recent property tax bill

Can You Get A Student Loan As A Refugee?

Refugees that have resettled and applied successfully as permanent residents are eligible for student loans, like any other type of permanent resident. But if you are a non-resident, you’re not eligible for a Canadian student loan. 

Can You Get A Mortgage As A Refugee?

Yes, anyone — including non-immigrants — can apply for a mortgage to finance the purchase of a home. The real estate market across Canada is accessible to almost anyone, including those who are not considered residents or citizens of Canada.

Keep in mind, however, that while the process of applying for a mortgage is very similar for both residents and non-residents, there may be more documentation required for non-residents to reduce the risk for the lender. 

Need a car loan? Learn how to get a car loan as a newcomer to Canada.

Can You Get A Credit Card As A Refugee?

Again, if you have a PR card that validates your status as a permanent resident of Canada, you can apply for any credit card in Canada. Most big banks in Canada also offer credit cards to non-residents.

That said, it may be difficult to get approved for an unsecured credit card since you likely have no credit history. 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 Interest Rates Min. Deposit
Refresh Financial Secured Visa $12.9517.99%$200
Plastk Secured Visa Credit Card $48 (+$6 monthly fee)17.99%$300
Home Trust Secured Visa Card0$ or $59- 19.99% (no annual fee)
- 14.9% (with annual fee)
$500
Vancity enviro Secured Visa Card$0 - $395- 11.25%
- 19.50 %
$500
TD Secured Credit Card$2919.9%$500
Capital One Guaranteed Secured Mastercard $5919.8%$75

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. The funds obtained from these loans can be used to 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. Assistance under this program may include the following:

  • Greeting newcomers at the airport 
  • Offering temporary accommodations
  • Helping newcomers adjust to life in Canada, such as teaching life skills or financial training
  • Helping to find a permanent home
  • Referring to other relevant programs

Loans For Refugees FAQs

What is a credit score? 

A credit score is calculated from the information on your credit report. It tells lenders and creditors how responsible you are with your finances and credit. Lenders use this information to determine how of much of a risk you would be as a borrower. If you manage your credit well, your score may go up, but if you are irresponsible with your finances, your score may go down.

How do you build credit in Canada as a refugee? 

In order to build credit, you need to use credit. Getting access to traditional credit products can be difficult if you don’t have any credit yet. In this case, consider other alternatives, such as secured credit cards. If you pay your credit card bills on time every month and keep your credit utilization low, you can build a strong credit score. 

What documents do I need to apply for a loan as a refugee? 

The exact documents required to apply for a loan as a refugee will vary based on the type of loan you’re taking out. In general, the following are some of the more basic and common documents needed to apply for a loan as a resettled 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.

Final Thoughts

Refugees may have a more difficult time getting access to credit when they first move to Canada. However, there are programs and products available that can help them get the funds needed to cover life’s biggest expenses while building healthy credit at the same time.

Lisa has been working as a writer for more than a decade, creating unique content that helps to educate Canadian consumers in the realms of real estate, mortgages, investing and financial health. For years, she held her real estate license in Toronto, Ontario before giving it up to pursue writing within this realm and related niches. Lisa is very serious about smart money management and helping others do the same. She's used a variety of financial tools over the years and is currently growing her money with Wealthsimple, while stashing some capital in a liquid high-interest savings account so that she always has a financial cushion to fall back on. She's also been avidly using her Aeroplan TD credit card to collect as many Aeroplan points as possible to put towards her travels!

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