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Unexpected situations and emergencies can happen to anyone, no matter what your employment or financial circumstances are. So even though you may be on Employment Insurance (EI), needing a loan to cover an unforeseen cost could still happen to you.
Getting approved for a loan while on Employment Insurance may seem impossible given that it isn’t a traditional source of income. However, the good news is that it is not impossible and that there are different types of loans out there that you can get while receiving Employment Insurance.
Types Of EI Loans
Employment Insurance (EI) helps countless Canadians every year get back on their feet after the loss of a job. Unfortunately, the benefits aren’t always enough to cover the cost of daily living as well as the cost of an emergency or unexpected event. It’s not uncommon for those on EI to need additional financial assistance; this is where a loan can help.
Payday Loans For EI
An EI payday loan will allow you to access up to $1,500. This type of loan is usually repaid by your next payday, which can range from 1 to 4 weeks. Depending on the province you reside in, rates can go as high as $25 per $100 you borrow.
To qualify for an EI payday loan, you’ll need to find a payday lender who accepts EI as a form of income. You can apply for an EI payday loan online or in-store, you simply need to be able to prove you do receive EI.
Cost Of Borrowing A Payday Loan While on EI
Depending on the province you live in, the cost of borrowing $100 will vary.
|Province||Max cost per $100 borrowed|
(Max Interest Rate)
|Newfoundland and Labrador||$21|
|Prince Edward Island||$25|
Installment Loans For EI
A more affordable option would be an installment loan. An EI installment loan can be a better option as they have lower rates and longer terms, making it easier to repay the loan. Moreover, while installment loan lenders typically have higher requirements than a payday lender, they are much more flexible than banks and other traditional financial institutions.
To qualify for an EI installment loan, you’ll need to find a lender who accepts EI as a form of income. However, these lenders will also look at your debt to ensure you can afford to take on the loan.
Personal Line Of Credit For EI
If you’re trying to qualify for a personal line of credit while on EI, you’ll need to find a lender who accepts EI as income. Some well-known lenders that offer personal lines of credit to those who get EI are Cash Money and Mogo. This can be a great option as interest is only charged on the amount you use. Moreover, like a credit card you can re-access the same funds as you repay the money.
Car Title Loan For EI
A car title loan is another type of loan you can get while on EI. Since a car title loan is secured by the car itself, lenders are more willing to lend to individuals with poor credit and non-traditional forms of income. This ensures the lender can recoup payments even if you end up defaulting on the loan. However, it’s important to remember that car title loans come with high-interest rates and have short terms, which can make them very difficult to repay.
Best EI Loans In Canada 2021
|Types of Loan||Funding Time|
|Lending Mate||Up to $10,000||43%||36 – 60||Guarantor loan||With 24 hours||More Info|
|Magical Credit||Up to $20,000||19.99% – 46.8%||6 – 60||Personal loan||Same day||More Info|
|LendDirect||Up to $15,000||19.99%||Open-end||Line of credit||Same day||More Info|
|ICash||Up to $1,500||15% – 23%||–||Payday loan||Within 24 hours||More Info|
|Captain Cash||$500 – $750||28% – 34.4%||3||Short-term loan||Same day||More Info|
|Cash Money||$100 – 10,000||–||6 – 60||Line of credit||Within 24 hours||More Info|
|Cash4You||$1,000 – $15,000||46.93%||12 – 60||Personal loan||Within 24 hours||More Info|
Benefits Of Applying For An EI Loan With An Alternative Lender
- Convenient – Alternative EI loan lenders often have a simple and fully online application process.
- Fast Funding – Many EI loan lenders have an automated underwriting process which results in quick approvals and fast funding. Most lenders will fund you through direct deposit or e-transfer.
- Accepts A Variety of Borrowers – Alternative lenders usually have flexible requirements that allow those with non-traditional sources of income and those with subprime credit the opportunity to get a loan.
- Free Instant Loan Quote – Many lenders also provide free instant loan quotes. You can find out how much you may qualify for based on a few questions. This usually will not hurt your credit score as there is no credit check involved.
Getting approved for a loan while on EI is possible, you just need to find the right lender who can and is willing to work with you. Do your research and before long you should be able to find a loan and a lender who are right for you.
Steps On How To Apply For An EI Loan In Canada
A more traditional bank or lending institution may deem you an undesirable candidate for a personal loan because they often focus their approval on factors such as your credit score, income level and whether you have a steady job. Unfortunately, if you don’t meet their requirements you will more than likely be rejected. This is why we recommend that you work with a more specialized lender who accepts non-traditional sources of income and borrowers with different credit profiles.
Step 1: Review Your Finances
Before applying for any loan, it’s important to understand where you stand with a lender. Lenders will look at your income, debt-to-income ratio, credit history, and other factors that affect your financial health. By reviewing your finances prior to applying for a loan, you’ll know which lenders you’ll have a chance with. This will help you avoid applying with lenders whose basic requirements you don’t meet, which can then prevent any unnecessary credit checks which can hurt your credit.
Step 2: Compare Lenders And Get A Loan Quote
Before choosing to work with a lender, it may be in your best interest to get a few loan quotes so that you may compare multiple offers. This can help you save hundreds of dollars in interest and fees. If you’re unsure about how to go about doing that or simply do not have time, you can use a loan comparison platform like Loans Canada. You simply need to complete a single application to receive multiple loan offers.
Step 3: Get A EI Loan
Once you’ve reviewed your options, simply choose the lender you want to work with. You may need to send additional information to complete the application. Once you’ve been approved, the lender will send you the funds.
Alternative EI Loans: A Guarantor Loan
Getting a guarantor loan can be an efficient way of financing your expenses while you’re looking for a new job or when your bad credit prevents you from being approved by traditional lenders, such as banks and credit unions. To do this, you would have to find a responsible borrower with good credit and finances. They will then co-sign your application, thereby strengthening your creditworthiness and greatly increasing your chances of approval.
Pros Of Guarantor EI Loans:
- Your bad credit (if that’s the case) will no longer be an issue since your lender will be examining your co-signer’s credit instead.
- Even if your credit is not an issue, you’ll still be primarily responsible for your loan payments. This means that your credit will still be improved with every timely, full payment you make.
- You may be approved for a more affordable interest rate, making your loan cheaper over time.
Cons Of Guarantor EI Loans:
- As it would be with a regular loan, you might be charged a penalty and added interest if you default (don’t make your loan payments on time or don’t follow your loan contract in some other way).
- Your guarantor becomes the primary payment maker if you default for too long, which ultimately results in them being in debt. That debt might lead to more severe consequences for both you and your guarantor if they also can’t afford the loan payments.
What is Employment Insurance (EI)?
Can I get a payday loan while on EI?
Can I get a loan if I’m on EI and have bad credit?
How does Employment Insurance work?
Is employment insurance considered as income by lenders?
How much money can I get through EI?
For all the information you need on Employment Insurance, visit the Government of Canada’s website.
Loans For Borrowers On Employment Insurance (EI)
Being on Employment Insurance (EI) is probably not something you had ever expected or wanted, but that’s the thing about jobs, life and money, they can be unpredictable even when you think you have it all figured out. At Loans Canada we will be there with the financial help you need when life has gone off the tracks, but we also practice responsible lending practices. There is a right way and a wrong way to take out a loan when you’re on EI. Protecting your financial future is our number one goal and we’ll work with you to get you the appropriate loan for your unique financial situation.
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