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Loans for people on a pension

Just because you receive a pension doesn’t mean you can’t take out a loan.

Looking for personal loans? Compare lenders
Looking for payday loans? Compare lenders

As Canadians head into their golden years, their income sources shift into government-provided benefits, such as Canada Pension Plan (CPP), Old Age Security (OAS) and/or a private pension. If these are your only sources of income, and you’re looking for a loan, you may find your options are more limited compared to when you were actively employed, but you do have options.

Option 1: Personal loans

Name Product Interest Rate Loan Amount Loan Term Requirements Credit Score Link
Fairstone Personal Loan (Unsecured)
26.99% - 39.99%
$500 - $25,000
6 - 60 months
Able to make monthly repayments on your loan
Min. credit score: 560
Go to site
More Info
An online lender with a team dedicated to professional service. Get a quote for an unsecured loan without impacting your credit score. Receive funds within as little as 24 hours. No prepayment fees.
Cash Money Line of Credit
$100 (in store), $500 (online) - $10,000
No end dates
No min. income or employment requirements
Min. credit score: 560
Go to site
More Info
Cash Money offers line of credit loans up to $10,000 for AB, BC, NS, ON and SK residents. (Residents of MB or NB can apply in-store only.)
LendDirect Line of Credit
19.99% - 46.93%
$100 - $15,000
No end dates
Min. income of $1,500 /month
Min. credit score: 560
Go to site
More Info
Borrow up to $15,000, based on your income and credit history, with a line of credit from LendDirect.
Money Mart Installment Loan
29.90% - 46.90%
$1,000 - $15,000
12 - 60 months
No min. income or employment requirements
Min. credit score: 300
Go to site
More Info
Get a $100 eGift card when you apply online, connect your bank account using Express and make your first payment. To be eligible for an installment loan, you’ll need to be at least 18 years of age with a steady source of income and a chequing account.
Cash Money Installment Loan
$500 - $10,000
6 - 60 months
Stable source of income
Min. credit score: 560
Go to site
More Info
Cash Money offers installment loans up to $10,000 for Alberta, Manitoba and New Brunswick residents. Online installment loans are available in Alberta only. Residents of Manitoba and New Brunswick must apply in-store.

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What types of income are acceptable?

When you borrow money, lenders need you to show proof that you have some form of income since you have to be able to pay back the loan. Some lenders have minimum income requirements, while others insist that your income must come from an employer. Overall, lenders just want to see that you can comfortably pay back your loan and still pay for necessities in life such as food, housing and utilities.

While some lenders require you to be employed, others will accept forms of income such as:

  • Private pensions
  • CPP and OAS
  • Personal investment income

What types of pensions are considered by lenders?

  • CPP. Canada Pension Plan is the monthly income Canadians receive once they hit retirement age. Throughout your working years, you will have contributed small amounts to your Canada Pension Plan. Some employers also contribute to your CPP, which will likely mean you’ll receive a higher amount than someone who’s employer did not contribute.
  • OAS. Old Age Security provides additional retirement income to people of a certain age after they retire from their careers. Unlike CPP, Canadians don’t pay into OAS directly from their income during their working years. Instead, it’s funded out by federal tax revenues.
  • Private pensions. You may have also contributed to a private pension, either through your job by funnelling your personal savings into a private RRSP. You’ll still receive both CPP and OAS in addition to being able to withdraw from your private pension.

Types of personal loans that accept pension

While it may be harder to secure a personal loan via a traditional lender with just your pension and OAS income, online lenders are readily available to help you get the funding you need. Your personal loan options vary from secured and unsecured loans to lines of credit and instalment loans. Here’s a closer look at each option and its key features:

Option 2: Payday loans

Payday loans are another option for Canadians receiving a pension, such as the CPP or OAS. Payday loans are a bandaid solution that should only be used as a last resort because they have annual interest rates that are as high as triple digits and need to be repaid the next time you receive your pension cheque.

If you’re in a financial emergency, payday loans are available though. They’re available to Canadians in a bad credit situation and to Canadians who don’t have employment income. Instead, payday lenders insist you prove that you have steady income to repay the loan when it’s due.

It’s worth noting that payday loans cap out at just $1,500 and must be repaid within 62 days at most.

⚠️ Warning: Be cautious with payday loans
Payday loans are expensive. If you're experiencing financial hardship call Credit Counselling Canada for free financial counselling (Monday-Friday 8:00am-5:00pm at +1 866-398-5999). Consider alternatives instead of a payday loan:
  • Local resources. Government programs and nonprofits offer free financial services and help with food, utilities and rent.
  • Debt relief companies. There are services to help you reduce your debt payments.
  • Payment extensions. Talk with bill providers about longer payment plans or due-date extensions.
  • Side jobs. Sell unwanted items online, sign up for food delivery and more.

Compare payday loans for CPP, OAS or private pension

Name Product Loan Amount Loan Term Interest Rate Turnaround Time Serviced Provinces
24/7 CASH
Money Mart Payday Loan
$120 - $1,500
1 - 62 days
Varies by province
As little as 1 hour after getting approved
To be eligible, you’ll need to be at least 18 years of age with a steady source of income and a chequing account. No credit check required.
iCASH Payday Loan
$100 - $1,500
7 - 62 days
Varies by province
As little as 2 minutes with INTERAC e-Transfer
Get up to 20% in cash back once your payday loan is fully repaid. Conditions apply.

To be eligible, you'll need to be at least 19 years of age and have a net income of at least $800/month deposited into your bank account.
Cash Money Payday Loan
$100 - $1,500
5 - 40 days
Varies by province
As little as 15 minutes with INTERAC e-Transfer
Apply for your first $300 payday loan at a $20 cost (excludes SK applicants).

You'll need to be 18 years of age or older and have a net income of at least $1,000/month. Residents of MB and NB must apply in-store for a loan.
GoDay Payday Loan
$100 - $1,500
Up to 62 days
Varies by province
As little as 2 minutes with INTERAC e-Transfer
To apply, you'll need to be a Canadian resident over the age of 18 with a valid email address, phone number and an open bank account with a Canadian bank or credit union.

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Maximum borrowing costs per province
Always refer to your contract for exact repayment amounts and costs as they may vary from our results.
Province Maximum allowable cost of borrowing
Alberta, British Columbia, New Brunswick, Ontario & Prince Edward Island $15 per $100 borrowed
Manitoba & Saskatchewan $17 per $100 borrowed
Nova Scotia $19 per $100 borrowed
Newfoundland and Labrador $21 per $100 borrowed
Northwest Territories, Nunavut & the Yukon $60 per $100 borrowed
Quebec Limit of 35% annual interest rate (AIR)

How to apply for a loan when you’re receiving a pension

Once you’ve compared lenders that accept pension as a form of income, you’ll need to make sure you meet the other eligibility criteria. You’ll also need to gather documents and then apply online. You can apply online for a loan in the table above by clicking the green ‘Go to site’ button, where you’ll be securely redirected to the application page.

Bottom line

Even if you’re no longer in the workforce, you can still apply for a loan. Many lenders accept OAS, CPP and private pensions as a form of acceptable income, which means if you’re able to make your loan repayments and you meet the other eligibility requirements, you could be approved.

Want to learn more about loans? Head to our personal loans guide here.

Frequently asked questions

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