As Canadians head into their golden years, their income sources shift into government-provided benefits, such as Canada Pension Plan (CPP) and 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 still have options. Whether you’re looking for a personal or payday loan, there are several pension loans in Canada available to seniors.
To get approved, you’ll just need to show the lender that you have enough pension income to repay the loan. You can do this by providing bank statements from the last 60 to 90 days.
Compare loans for pensioners in Canada
The providers of personal loans below accept full-time pension as valid income.
Where can you get pension loans in Canada?
You can get pension loans from some alternative lenders and financial institutions. Financial institutions have stricter requirements – you’ll need good credit and a low debt-to-income (DTI) ratio to get approved. Alternative lenders, on the other hand, have more flexible requirements, but their rates for pension loans are typically higher.
What incomes do lenders accept for pension loans in Canada?
All lenders want to see that you can comfortably pay back your loan and still pay for expenses in life such as food, housing and other debts.
While many lenders require you to be employed, lenders of pension loans in Canada will accept other forms of income such as:
- Private pensions (Sun Life, Blue Cross, Manulife, etc.)
- Canada Pension Plan (CPP)
- Old Age Security (OAS)
- Guaranteed Income Supplement (GIS)
- Ontario Teachers’ Pension Plan (OTPP)
- Personal investment or retirement income
- Other government benefits
Eligibility requirements of personal loans for pensioners
While requirements vary from lender to lender, you’ll generally need the following:
- Steady pension income. The lender will want to see that you have regular pension income being paid to you via direct deposit.
- Low DTI ratio. This is the percentage of monthly debts you pay out of your monthly income. You typically need a DTI under 40% to get approved. Some alternative lenders can approve a higher DTI, but they’ll charge higher rates because they would consider you a riskier borrower.
- Good credit score. You’ll need a credit score above 660 to get competitive rates. If your credit score is below this, you can still get approved by an alternative lender specializing in fair or bad credit loans, but be prepared for higher rates.
How do the different types of pension incomes work?
- 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 funneling 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 pension loans in Canada
While it may be a bit harder to secure a personal loan via a traditional lender with just your pension and OAS income, online lenders are readily available to offer pension loans in Canada. As a pensioner, your personal loan options vary from secured and unsecured loans to lines of credit and installment loans. Here’s a closer look at each option and its key features:
Option 2: Compare payday loans for pensioners in Canada
Payday loans are another option for pension loans in Canada. They are fast and easy to get because of their lenient eligibility requirements. Many payday lenders accept pension as a valid source of income, and they can also approve pensioners with bad credit.
⚠️ Warning: Be cautious with payday loansPayday 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 payday loan alternatives:
- Visit 211.ca. A free and confidential service that connects you to organizations that can help with finances, food, housing and more.
- Debt relief providers. There are services to help you reduce your debt payments.
- Payment extensions. Talk with bill providers about longer payment plans or due-date extensions.
Maximum borrowing costs of payday loans per provinceAlways 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 & Nova Scotia||$17 per $100 borrowed|
|Newfoundland and Labrador||$14 per $100 borrowed|
|Quebec||Limit of 35% annual interest rate (AIR)|
What you should know about payday loans for pensioners in Canada
It’s worth noting that payday loans cap out at just $1,500 and must be repaid within 62 days. Payday loans are also a very expensive way to borrow, where you could end up paying anywhere from $14 to $17 for every $100 borrowed. As pensioners, it’s important to ensure you have the money to make the full loan repayment when the time comes, and you’ll have enough left over to pay for other expenses.
Eligibility requirements of payday loans for pensioners
You can get approved for a payday loan using your CPP, OAS or other type of pension as long as it’s recurring. The only way you may not get approved even if you have pension income is if your existing debts and expenses are too high. If your bank statements show lenders that you may not have enough pension income to repay your loan, they may not approve you.
Can I get payday loans for pensioners with no credit check?
Yes, some lenders in Canada offer offer payday loans for pensioners with no credit check, like Money Mart and Pay2Day. But keep in mind that even if a payday loan provider does do credit checks, they tend to have lenient eligibility requirements and you may still be able to qualify with a bad credit score.
How to apply for a pension loan in Canada
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 pension loan in the table above by clicking the green “Go to site” button, where you’ll be securely redirected to the application page.
Basic eligibility criteria for pension loans in Canada
While basic eligibility criteria can vary between providers, it usually includes the following:
- Be a Canadian citizen or a permanent resident.
- Have an active bank account.
- Meet the minimum income requirements.
- Meet any minimum credit score requirements.
Required documents for pension loans in Canada
Documents may include the following:
- Bank statements from the last 60 to 90 days
- Government-issued ID
- List of assets and debts if you’re applying to a financial institution
Even if you’re no longer in the workforce, you can still apply for a pension loan in Canada. Many lenders accept OAS, CPP and private pensions as valid 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 about pension loans in Canada
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