How to get a loan on Employment Insurance benefits

Learn how to get approved for EI loans

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If you’ve lost your job in Canada, chances are you’re one of hundreds of thousands of Canadians on Employment Insurance (EI). If you receive monthly payments and want to take out loans on EI, you have options – although they’re more limited than if you were actively employed.

Can I get a loans on EI benefits?

You can take out a loan while you’re on EI and it won’t impact your benefits. In fact, receiving Employment Insurance could even help you qualify to borrow more money from a lender. This is because EI is generally considered as a form of income, and the more income you have, the more lenders are willing to lend you.

Your payments from EI can be especially helpful if you don’t have any other sources of income coming in (like disability assistance or the Canada Child Benefit). This is because they can prove to the bank that you have the means to pay back what you borrow, even though you’re between jobs.

Compare loans while on Employment Insurance benefits

The following lenders typically consider Employment Insurance as an acceptable form of income, which means should you meet other eligibility requirements, you may be eligible for a loan.

Name Product Interest Rate Max. Loan Amount Loan Term Fees Min. Credit Score
Cash Money Installment Loan
46.93%
$10,000
6 months - 5 years
Vary across provinces/territories
560
Cash Money offers installment loans up to $10,000 for AB, MB and NB residents.
LendingMate Personal Loan
43% (British Columbia and Ontario) and 34.90% (Quebec)
$10,000
1-5 years
None
700
LendingMate offers loans to Canadians with poor credit with no credit checks. Guarantor required for application.
LendDirect Personal Loan
19.99% - 46.93%
$15,000
No end dates
None
560
Borrow up to $15,000, based on your income and credit history, with a personal line of credit from LendDirect.
LoanConnect Personal Loan
4.6%-46.96%
$50,000
6-60 months
No application or origination fees
N/A
LoanConnect is an online broker that matches borrowers to lenders offering loans in amounts from $500 to $50,000. Get approved in as little as 60 seconds with any credit score.
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Compare up to 4 providers

What is the Employment Insurance program?

Canada’s Employment Insurance (EI) program is run by the federal government. It was put in place to support Canadians who get laid off from their jobs due to a shortage of work or the closure of a business.

So how does it work? You’ve probably noticed that your employer takes an EI premium off every paycheque (which they also match on their end). This money sits in a fund that gets paid out to you if you lose your job.

How to qualify for employment insurance benefits

The most important factor to qualify is that you get laid off from your job (and aren’t fired for good reason). From there, you’ll need to have worked a required number of hours (between 420 – 700) in the last calendar year. You’ll also need to have made contributions to EI through your paycheques. If you meet these criteria, you should be eligible to receive around 55% of your previous income through the program.

Options for EI Loans

If you need extra cash, you could consider the following types of loans:

  • Secured loans. Secured loans require you to put up some sort of asset (like your house or vehicle) to “insure” your payments. If you default, your lender gets to sell the asset to get their money back.
  • Unsecured loans. Unsecured loans don’t require an asset, but rely heavily on your credit score. If your score is 650 or higher, you should be able to qualify for this type of loan (if you meet the other eligibility requirements).
  • Guarantor loans. If a friend or family member has a good credit score, you might like to ask them to co-sign for your loan. This way, you should be able to qualify for more money and get more favourable rates.

How to apply for loans on EI

To apply for personal loans for people on EI, you’ll need to:

  • Check your credit score. The first thing you should do is check your credit score. If your credit score is under 650, you may have more trouble getting a loan with competitive rates and terms.
  • Compare lenders. Compare at least 3-4 lenders to find the most competitive rate and term. This could save you thousands of dollars every year on interest charges and fees.
  • Find out if you’re eligible. Check the eligibility criteria for approving a loan. Do you need to have a certain credit score? Are there any minimum income requirements? Is EI even an acceptable form of income? Only apply for loans you know you can qualify for – and if you’re not sure, contact a lender and ask.
  • Apply selectively. You should choose one loan and apply for it. Applying for multiple loans at one time can damage your credit score. This is because every time a lender does a credit check on your credit file, your score will go down a few points.
  • Submit your application. Once you find the right lender for you, fill in an application to get the ball rolling. (You can also click the green “Go to site” button in the table above to be redirected to a lender’s application page.)

Bottom line

If you find a lender that considers Employment Insurance (EI) as an acceptable form of income and you meet their other eligibility criteria, you could potentially be approved for a loan on EI. Before applying, contact a lender to confirm that they accept borrowers on EI and compare different lenders to find the best rates and terms available to you.

If you’d like to learn more about personal loans, head to our guide here.

Frequently asked questions

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