Loans For Single Parents

Loans For Single Parents

Written by Bryan Daly
Fact-checked by Caitlin Wood
Last Updated December 9, 2021

Being a single parent can be extremely difficult, expensive and time-consuming. Especially if you don’t have enough savings to cover the costs that come your way, such as groceries, household supplies, and your child’s education. You may also have more than one child at home, which can add even more costs to your daily budget. 

Yes, living on a single income and dealing with your children’s (as well as your own) emotional and financial needs can certainly be a chore. Not to worry, because there are plenty of ways to pay for all the expenses you encounter, like applying for a loan. Keep reading to learn more about loans for single parents. 

Financial Support Available For Single Parents

There are a few different loan options that single parents can apply for in Canada, including but not necessarily limited to:

Bank & Credit Union Loans

When they need financing, most people will turn to their financial institution, where large loans, low-interest rates, and long repayment terms are often available to qualified members. Financial institutions also have much better security than other lending sources. On the other hand, banks and credit unions generally have tough borrowing guidelines to surpass, so it can be hard to get approved for a loan if you:

  • Have a single household income
  • Are only working part-time or living off government benefits
  • Have no collateral or other loan security to offer
  • Have bad credit or a credit history filled with missed payments 

Government Assistance

In Canada, single parents can apply with the federal government and become eligible for various financial benefits and tax credits, such as the:

  • Canada Child Benefit (CCB) – Administered by the Canada Revenue Agency, the Canada Child Benefit provides single parents with a monthly tax-free payment, if their child is under 18. Payment sizes can vary based on the parent’s situation, how many children are present and what province/territory the family resides in. 
  • HST/GST Tax Credit – Single parents and families with low incomes can also get a tax-free quarterly payment to help offset most or all of the Goods and Services Taxes and/or Harmonized Sales Taxes they have to pay yearly. When you file your income taxes, the CRA will automatically consider you for this credit.
  • Provincial/Territorial Credits & Benefits – Depending on where you live, you may be eligible for other government programs. For example, single parents in British Columbia can obtain the BC Early Childhood Tax Benefit, which offers up a monthly tax-free payment to families raising children under the age of 6.

Alternative Loans

Single moms and dads can also apply for loans with an alternative lender, if they can’t qualify with their financial institution or their government benefits are insufficient. Here, approval requirements are less strict and applications can be completed online within a few minutes. You can even borrow against your CCB or provincial/territorial benefits. Additionally, approval times can be faster than those of a financial institution. 

However, there are some risks involved with applying for an alternative loan, such as:

  • Higher interest rates and fees may apply
  • Loans may be smaller and have shorter terms, as well as larger payments
  • Private companies are harder for the government to regulate, so there’s more potential for scamming fraud and identity theft 

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Types of Loans Single Parents Can Get With Alternative Lenders

Whether you’re a single mom or dad, rest assured that you can find plenty of different alternative loan options in Canada, including but not restricted to:

  • Personal Loan – A lump sum of liquid money that gets deposited directly into your bank account and must be repaid in installments. Don’t forget, an alternative personal loan can be easier to qualify for than a bank personal loan. 
  • CCB Loans – Some lenders can give you a cash advance using your Canada Child Benefit as an alternative form of payment since it can technically qualify as income. 
  • Bad Credit Loans – If you can’t get approved with a bank because you have a bad credit score of 300 – 600, it’s because you’re considered too risky. Thankfully, there are many bad credit lenders with easier approval requirements in Canada.
  • Payday Loans – As a last resort, you can apply for a payday loan, which can have very easy approval requirements. However, payday loans come with extremely high rates, short terms (14-days) and severe defaulting penalties.

What Are the Minimum Requirements to Qualify For a Loan as a Single Mom or Dad?

The specific loan approval requirements you’ll run into can vary depending on which lender you apply with, how much money you’d like to borrow and how strong your finances are. Here are some of the main personal and financial requirements you should have to qualify for a decent loan, interest rate and payment term as a single parent:

  • Credit Score – A credit score of 650 – 900 means you’ve been good at making payments in the past, so you may be eligible for a favourable loan. That said, some lenders don’t check credit and will base your approval on other factors. 
  • Job Status – The most important element for loan approval is your income and employment status. The best way to qualify for a suitable loan is to apply with a steady full-time job and an income sufficient enough to cover your payments.
  • Income Level – The better your household income is, the easier it will be to qualify for a large loan with a decent interest rate and term. Most lenders want you to have a monthly income of at least $1,000 – $2,000 before approving you.
  • Assets – Lenders may also inspect your assets and liabilities, such as your home or vehicle. Since these properties can qualify as huge debts, some lenders may deny your application if you’re still in the middle of paying them down.  
  • Debt Level – The more outstanding debts you have, the harder it is to qualify for an appealing loan, interest rate, and repayment term. So, before you apply, it can be helpful to consolidate as many of your unpaid debts as possible.

Frequently Asked Questions

How much can I borrow as a single parent with bad credit?

Loan amounts and approval requirements can vary from lender to lender. Nonetheless, many lending sources will deny your application or approve you for unappealing loan conditions if you have bad credit. This is one situation where it can be better to apply with an alternative or bad-credit-friendly lender. In fact, some alternative lending companies can offer you a loan of up to $35,000, as long as you’re a qualified borrower with a strong income, decent credit and a good overall chance of paying all your installments, interest and fees on time.

Can my marital status affect my ability to get a loan?

Typically, no. Lenders will not judge you based on your marital status. In most cases, the main deciding factor is whether or not you can cover your loan payments. However, you may be denied or considered less creditworthy if you’re struggling to pay off a bunch of pre-existing debt from a divorce, such as legal fees or alimony payments. 

As a single parent, how can I get the best interest rate?

Remember, your overall financial health can have a significant impact on your loan conditions, as well as the interest rate you qualify for. Some lenders charge fixed rates, which don’t change during a loan term. Others charge variable rates, which can go up and down with Canada’s prime rate.  Don’t worry, because there are a few surefire ways to earn the best interest rate available, including but not limited to:
  • Research and compare quotes – There are tons of online and physical lenders all across Canada, each offering different rates and loan conditions. Any good lender should also give you a free loan quote to factor into your budget. Be warned, the quote you receive may not equal the actual cost of your loan. 
  • Improve your finances and credit – While it can be difficult to maintain a full-time or second job as a single parent, any income and savings you can generate will help make your application stronger. By paying down debt and not using too much credit, you can also gradually increase your credit score. 
  • Find a Cosigner – If your income or credit score aren’t good enough to qualify, a more stable borrower can cosigner your loan, which should give you better approval odds. Your cosigner will become responsible for your loan payments if you can’t afford them on your own.
  • Apply For a Secured Loan – You may also get better approval odds by offering your lender some collateral, such as your vehicle, in order to decrease the amount of risk they’re taking. Be careful as a secured loan means your lender has the right to seize your asset if you miss too many payments.  

Are You a Single Parent Looking For a Loan in Canada?

Loans Canada can help you compare your options and choose the best option based on your needs as a single parent. Our lender directory is a great place to start if you’re in the market for a loan.

Loan Glossary

Accrued Interest

Interest that is earned by an individual, but not yet received. Or, interest that is owed, but not yet paid. Interest is typically earned or payable after a certain period of time, such as a month or a year, which is why it can accrue.

Annual Percentage Rate (APR)

The interest rate you pay over a full year in exchange for borrowing. An APR is expressed annually but is typically charged monthly. You can determine the total monthly interest you’ll pay on debt by multiplying the borrowed amount by the APR and then dividing by 12.


Anything that has financial value is considered an asset. In order to reap the benefits of an asset, you must also own it as an individual or business. When it comes to debt, usually only real estate, jewellry, vehicles, and investments are considered assets.


An individual or entity that takes something (for example money or equipment) with the intention of returning it to the original owner. When the borrower it taking out a loan, there is usually an agreement involved and applicable interest.

Cash Advance

A cash withdrawal from a credit card. Cash advances are a very expensive form of financing as the interest rate on the borrowed amount is higher and there is often a flat fee. In addition, interest becomes effective immediately after you withdraw the cash, instead of after the balance due date.


An individual who shares an obligation of something that was borrowed with one or more people. All co-borrowers listed on an agreement are fully responsible for repaying the obligation.


Any asset that is used to secure debt. In the event that the borrower defaults on the loan, the lender has the right to seize the asset and sell it to cover the owed amount. Collateral is also commonly referred to as security.


An individual who agrees to make your loan payments and otherwise be responsible for your debt in the event that you default on the loan. Using a cosigner is a popular option for individuals who have trouble securing debt on their own.

Cost of Borrowing

All of the costs a borrower incurs when borrowing an asset or money. Examples of borrowing costs include legal fees, interest, loan origination fees and penalties.


An individual or entity that owes a sum of money to a creditor.


Failure to pay the minimum payment on a loan or account on or before the agreed-upon payment date. Delinquency is typically categorized in 30, 60, 90 or 120 days since lenders typically have monthly payment cycles. Delinquent accounts may eventually turn into defaulted accounts.


An individual who relies on another individual for financial support. Usually, this refers to a family member, common-law partner or spouse who is unable to financially support themselves.


The market value of an asset you own less the amount still owed (including any additional fees to sell or repay debts) on the loan used to purchase the asset if any. Equity increases when you pay down the debt as well as when the value of the asset increases. Equity can be calculated at any point in time and is also referred to as lendable value or net value.


A payment schedule that breaks up an owed amount of money into several equal amounts, otherwise known as installments, which are paid over an agreed period of time.


An amount of money that is borrowed by one entity from another with the expectation that the amount will be paid back. Interest is typically applied on the owed amount.

Loan-to-Value Ratio (LTV)

The ratio of what amount was borrowed to purchase an asset in relation to the market value of that asset. The formula would be: the total amount borrowed for the purchase divided by the total selling price of the asset. The borrowed amount can differ from the selling price if the individual makes a down payment, for example. In general, the lower the LTV, the more favourable the terms of the financing will be.

Payday Loans

A short term, small loan that a borrower promises to repay on their next pay day. Payday loans are known to be an expensive and risky form of financing that makes it challenging for the borrower to repay and manage.

Payment Period

The period of time over which a borrower is obligated to make a payment. Payment periods could be weekly, bi-weekly or monthly, sometimes even longer.

Prime Rate

The prime rate advertised by a lender is typically based on the Bank of Canada’s interest rate that is set each night, which may change at any time.

Principal Balance

The total remaining balance of a loan, without considering interest and other fees.

Secured Loan

A loan that is secured by an asset known as collateral or security. In the event that the borrower defaults on the loan, the lender has the right to seize the asset securing the loan and sell it to repay the owed amount. This type of loan bears less risk for the lender, but more risk for the borrower.

Unsecured Loan

A loan that is not secured by an asset known as collateral or security. In the event that the borrower defaults on the loan, the lender will not have the opportunity to seize the collateral or security to repay the owed amount. This type of loan bears more risk for the lender, but less risk for the borrower.

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Bryan is a graduate of Dawson College and Concordia University. He has been writing for Loans Canada for five years, covering all things related to personal finance, and aims to pursue the craft of professional writing for many years to come. In his spare time, he maintains a passion for editing, writing screenplays, staying fit, and travelling the world in search of the coolest sights our planet has to offer.

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