How To Finance Your Settlement As A PNP Express Immigrant

One way to immigrate to Canada is through the Provincial Nominee Program (PNP). With this program, you’ll need to apply to the PNP in the province or territory where you want to live. 

If you’re accepted through the Provincial Nominee Program, you’ll need to come up with a plan to fund your settlement in your new country. Read on to find out how to access loans as a newcomer to Canada. 

How To Finance Your Settlement As A PNP Immigrant

Getting access to money to help settle in Canada as an immigrant under the Provincial Nominee Program can be a bit challenging. Luckily, there are several programs available to eligible immigrants to help ease their financial burden.

Government Assistance: Immigration Loans Program 

The immigration Loans Program (ILP) is offered by the federal government to immigrants, particularly refugees, settling in Canada. This program offers different types of loans to cover the costs associated with resettlement in Canada. The three different loan programs are:

• Transportation Loans  – Helps cover travel costs from their home country to Canada.
• Assistance Loans – Helps cover the initial costs of resettlement.
• Right Of Permanent Residence Fee (RPRF) Loans – This loan is meant to cover the cost of an RPRF (when an immigrant seeks permanent residence). 

Transportation Loans

The transportation loan is designed to cover transportation costs for immigrants and their families when travelling from their home country to Canada. Expenses covered under this loan include the following: 

• Cost of accommodation and food prior to departure
• Cost of travel to Canada
• Transportation tax
• International Organization for Migration (IOM) service fees

Assistance Loans

The assistance loan is designed to help immigrants cover expenses associated with initial resettlement, such as basic needs and employment costs. The following expenses may be eligible for coverage under this loan:

• Rent
• Utilities
• Food
• Clothing
• Household goods
• Items required for employment
• Certification or licence fees for employment
• Child care 

Right Of Permanent Residence Fee (RPRF) Loans

The RPRF loan is specifically designed to help immigrants cover the cost of the RPRF when applying for permanent residency in Canada. Those looking for extra financing may apply for the RPRF loan in conjunction with other forms of financing through the Government of Canada. Such as the Transportation Loan, Assistance Loan and the Resettlement Assistance Program (RAP).  

Resettlement Assistance Program (RAP) 

The Resettlement Assistance Program sets funds aside to help offset the costs associated with transportation and assistance loans associated pre and post-settlement in Canada. 

As opposed to the Assistance Loan under the ILP, the program assesses each individual and their family’s needs and offers one-time allowances for necessities, without repayment. Depending on your circumstances, an individual through RAP may be granted financial support for items such as winter clothing, school materials, utility fees, furniture and other necessities associated with settlement. For more information on RAP and what may be covered, consult the Government of Canada’s website.

Personal Loans 

With a personal loan, your lender will loan you a specific amount of money, which you will be required to pay back in instalments over a specific period of time. The full repayment amount will include the principal loan amount, interest, and applicable fees.

A personal loan is a versatile loan that can be used to cover any expense without restriction, such as home renovations, car repairs, college tuition, and debt consolidation. Most loan amounts range anywhere from as little as $100 to as much as $50,000, with loan terms ranging from 6 to 60 months, on average. 

You can get a personal loan from conventional lenders, such as banks and credit unions. Personal loans are also available through alternative online lenders. Just be sure not to borrow more than needed, and consider the payment requirements before applying to ensure you can comfortably afford the loan with its added fees and interest. 

Alternative Lenders 

If you’re unable to meet the stringent criteria that are typically required by banks and credit unions to secure a personal loan, you may use an alternative lender instead. Getting approved for a personal loan from alternative lenders is usually much easier, as their lending requirements are typically less strict compared to traditional lenders. 

For instance, if you lack a strong credit score, a private lender may charge you a higher interest rate in exchange for loan approval due to the increased risk that the lender faces. In place of a good credit score, alternative lenders will place more weight on other factors, such as the following:

• Income
• Employment stability
• Debt 
• Assets

Be prepared to pay much more in interest for a personal loan from an alternative lender. That said, the loan can come in handy to cover all the costs associated with immigrating to Canada.

KOHO Instant Pay 

KOHO’s Instant Pay program is a free payroll benefit that lets employees get access to their pay before their scheduled payday. If you need an advance on your pay, Instant Pay will allow you to cash out as much as 50% of your paycheque. 

Having on-demand access to the money will help you stay on top of your bills, offer some financial cushioning in the event of an unexpected expense, and even some extra time to plan for wealth-building.

Instant Pay is free, unless you transfer the funds to a different bank account Plus, interest is not charged.

Newcomer Support Programs Offered By Canadian Banks

Many big banks in Canada have specialized programs meant to help new immigrants establish their banking and get their financial life started in Canada. Some of the programs geared toward immigrants include the following:

Scotiabank StartRight Program  

The Scotiabank StartRight Program is designed to help newcomers start banking in Canada. New immigrants can get access to savings, credit, free international money transfers, and help from financial advisors. 

Immigrants can open a Scotiabank international bank account online before arriving in Canada. Many Scotiabank representatives are multilingual, making it easier for newcomers to arrange for banking in Canada in their native language.

The Scotiabank StartRight Program is perfect for those who are landed immigrants and international students.

HSBC Newcomers Program

The HSBC Newcomers Program is another great option for newcomers to Canada. You can apply for an account before you arrive in Canada and receive up to $1,650 in value as part of the program.

Start by opening a chequing account today and receive up to $500 in cash back. You can easily view and transfer funds between your personal HSBC accounts in more than 30 nations, and conduct international banking with a variety of foreign exchange services.

As an HSBC client, you’ll also be eligible to receive up to an additional 6 months of no monthly banking fees on your chequing accounts.

CIBC Welcome To Canada Banking Package

Newcomers to Canada can start saving and managing their finances through the CIBC Welcome To Canada Banking Package, which includes the CIBC Smart Account for Newcomers.

Right now, you can take advantage of zero monthly fees for 2 years and can get as much as $400 back after opening a CIBC Smart Account for Newcomers. You can also make international money transfers quickly and safely to loved ones around the world. 

You may also qualify for a CIBC credit card to establish credit in Canada, get financial advice from the team of financial advisors, and work with CIBC’s team of mortgage advisors to help you buy your first home.

Newcomer-Friendly Online Banks and Online Banking Services

In addition to big banks, some online financial services also offer programs that are open to newcomers to Canada, including KOHO and Tangerine.

Earn Interest on Your Savings and Spending With KOHO 

KOHO is a free spending and savings account that comes with a prepaid Mastercard and mobile app. There is also a paid version that comes with additional perks. 

KOHO Easy Account

With KOHO, you’ll have the following perks available to you to help you spend and save responsibly:

• Earn savings interest. The free KOHO account lets you earn savings interest on your entire balance in your KOHO account. 
• Earn cash back. You’ll earn 1% instant cash back on groceries, bills and services, and up to 5% with KOHO partners.
• Credit Building Service – With the KOHO Easy Account, you can subscribe to the credit building service for $10 a month.

KOHO Essential Account

If you upgrade to the KOHO Essential Account, you’ll be able to take advantage of additional perks such as: 

• Higher rewards – Earn 1% cash back on groceries, bills & services and eating & drinking. All other purchases will give you 0.25%. If you shop with KOHO partnered merchants, you can get up to 5% extra cash back. 
• Credit Building Service – With the KOHO Essential Account, you can subscribe to the credit building service for $7 a month. 
• Fees – The KOHO Essential Account costs $4 per month or $48 annually.

KOHO Extra Account

In addition to the above-mentioned perks, KOHO Extra also comes with the following features:

• Higher rewards. Earn 2% cash back on transportation,  groceries, eating and drinking using your KOHO card. All other purchases will give you 0.5%. If you shop with KOHO partners, you can earn up to 6% extra cash back.
• Credit Building Service – With the KOHO Extra Account, you can subscribe to the credit building service for $7 a month.
• Fees – The KOHO Extra Account costs $9 per month or $84 annually.

Invest And Grow Your Savings With Tangerine 

Investing is a great way to grow your wealth, and Tangerine makes this easy. Tangerine offers a handful of tools that make saving and investing convenient. Including automatic contributions that eliminate the need for you to manually set funds aside.  

Tangerine is also known for its low fees, making investing as cost-effective as possible. In fact, you can start investing with as little as $25. You can invest your funds in a variety of account types, including the following:

• TFSAs
• RRSPs
• Non-registered investment accounts
• RIFs

What You Need To Apply For a Loan as a PNP Immigrant

To apply for a loan as a PNP immigrant, you’ll need the following:

Credit History 

Your credit score is key to accessing various financial products in Canada. It also plays a role in your ability to get a job, rent a car, and even rent a home. 

As a newcomer, you’ll need to build credit from the ground up, which can be difficult. Luckily, there are some programs that are designed to help those with no credit build a healthy credit history, including secured credit cards and credit-building programs.

Bank Account 

To receive the funds from a loan, you’ll need to have an active bank account. You’ll need to provide the financial institution with certain information when opening an account, including the following:

• Immigration papers or permanent residency card 
• Proof of address
• Government-issued identification (ie. passport, driver’s license, etc) 
• Social Insurance Number (SIN)

You may even be able to open a bank account before arriving in Canada with certain banks. To do so, contact the bank of your choice for further inquiry.

Proof of Immigration Status

You will need to prove that you are an immigrant applying through the PNP program when securing a loan. 

Proof of Income

To ensure you’re able to afford the loan, you will need to prove your income by supplying any one of the following documents:

• Employment record and contract 
• Proof of income for the PNP entry qualification
• Bank statements 
• Statement of assets (ie. real estate, investments, etc)

How To Build a Credit History in Canada as a PNP Immigrant

Even if you had good credit in your home country, you’ll need to start from scratch when you move to Canada, as foreign credit scores are not applicable in Canada. To help you build your credit history as a newcomer, consider the following tools.

KOHO Credit-Building Tool 

KOHO offers a convenient credit-building tool that’s meant to help no-credit consumers establish a solid credit history. With KOHO, you can open a line of credit dedicated to credit building and make timely payments each month to help you build your credit history and boost your credit score.

KOHO will work with you to ensure you stay on track with your payments. If you fall behind, your credit score could be negatively impacted.

Monthly Phone Plans

Some cell phone plans can also help you build a credit history in Canada as an immigrant. However, you must take out a ‘post-paid’ cell phone plan, and not a ‘prepaid’ one in order for your payments to be reported to the credit bureaus. 

A prepaid plan doesn’t incur any debt on your part, so timely payments won’t count toward your credit score. On the other hand, a post-paid cell phone plan means timely payments are noted on your credit report. That said, missed payments will also be reported, so make sure you pay your cell phone bills on time each month.

Ask Your Landlord To Report Your Rent

Rent isn’t usually reported to the credit bureaus, but you can always ask your landlord to report them to help you build credit. 

Open A Secured Credit Card 

Secured credit cards are one of the best ways to build credit as a PNP immigrant. Secured credit cards often don’t require a credit check, which makes them ideal for immigrants without credit in Canada. Moreover, with every timely payment you make, you can build good credit and eventually open doors to a slew of financial products in the future. 

Frequently Asked Questions

Final Thoughts

Getting approved for a loan as a Canadian citizen or permanent resident is challenging enough. But for immigrants, the process can be a bit more difficult, especially when applying for a loan with a bank. If you’re a PNP Immigrant and need some additional funds to help finance your settlement in Canada, you may have better luck with an alternative lender. 

That said, you should take steps to build your credit as soon as you arrive in Canada to help you gain access to various financial products you need to make your life in Canada more comfortable.