Pension Loans in Canada: Payday, Bad Credit & No Credit Check Loans

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 primary 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, even if you have bad credit.

Whether you’re looking for a personal loan, payday loan or cash advance, here are options available to seniors in Canada.

Jump to:

• Personal loans (borrow over $500, bad credit OK)
• Payday loans (borrow up to $1,500, bad credit OK)
• Cash advances (borrow up to $500, no credit check, no interest)

Compare personal loans for pensioners in Canada

These personal loan providers accept pensions as valid income. Bad credit is OK with some lenders.

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Finder Score	APR Range	Loan Amount	Loan Term	Broker Compliance	Key Features
Promoted Finder score 8.8 Great LoanConnect Installment Loan	Finder score 8.8 Great	8.99% - 35.00%	$500 - $2,500	3 - 6 months	Note: LoanConnect is a loan search platform with access to multiple lenders. Applicants will be matched with a suitable lender based on credit history and borrowing requirements.	Key features: Loan search platform, pre-approval in 5 minutes	Go to siteView details Compare product selection Compare	loading
Promoted Finder score 8.6 Great Loans Canada Installment Loan	Finder score 8.6 Great	8.99% - 35.00%	$500 - $50,000	4 - 60 months	Note: Loans Canada is a loan search platform. Apply once to get matched with lenders based on your credit and borrowing requirements.	Key features: Loan search platform, largest lender network	Go to siteView details Compare product selection Compare	loading
Finder score 7.1 Great MDG Financial Installment Loan	Finder score 7.1 Great	Undisclosed	Up to $1,600	Up to 36 months	Key features: Fast funding, easy application	ContinueView details Compare product selection Compare	loading

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Compare payday loans for pensioners

These Canadian payday loan providers serve seniors by accepting pension income as a valid source of income. Bad credit is accepted.

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Cost	Loan Amount	Loan Term	Key Features
iCash Payday Loan	$14 per $100 borrowed	$100 - $1,500	7 - 62 days	Key features: 24/7 instant approval and e-Transfer, accepts bad credit	Go to siteView details Compare product selection Compare	loading
Cashco Financial Payday Loans	$14 per $100 borrowed	$50 - $1,500	Up to 62 days	Key features: Instant approval, no credit check	View details Compare product selection Compare	loading
GoDay Payday Loan	$14 per $100 borrowed	$100 - $1,500	Up to 62 days	Key features: Instant approval, accepts bad credit	View details Compare product selection Compare	loading

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Compare cash advances for pensioners in Canada

These cash advance providers in Canada also accept pension income. You pay no interest on these loans, but you may pay a monthly fee. There’s also no credit check required, so bad credit is OK.

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Finder Score	Costs	Loan Amount	Loan Term	Rebate	Key Features
Finder score 8.7 Great KOHO Cover	Finder score 8.7 Great	0% + monthly fee from $2	$20 - $250	Flexible	Key features: Instant, no credit check or income required	Go to siteView details Compare product selection Compare	loading
Finder score 8.8 Great Bree Early Pay	Finder score 8.8 Great	0%	$20 - $500	Next pay cycle	Key features: Instant e-transfers, 24/7, no credit check	Go to siteView details Compare product selection Compare	loading
Finder score 9.3 Excellent Nyble Credit Line	Finder score 9.3 Excellent	0%	$30 - $250	31 days, extendable	Use code CFIND1J to get 500 extra points and a $5 higher approval. T&Cs apply.	Key features: Instant e-transfers, 24/7, no credit check	Go to siteView details Compare product selection Compare	loading

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Finder Score for cash advance apps

To make comparing even easier, we came up with the Finder Score. Interest rates, fees and features across 5+ cash advance apps are all weighted and scaled to produce a score out of 10. The higher the score the better the loan—simple.

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Where can you get pension loans in Canada?

Seniors looking for loans while receiving pension income can qualify with personal loan providers, payday loan lenders and cash advance apps. While traditional banks in Canada may also accept pension income, you typically need to have good credit and a debt-to-income (DTI) ratio under 40% to get approved.

Where can seniors with bad credit get a loan?

Seniors with bad credit can get funding from alternative lenders. Here are some options worth checking out.

How can seniors get instant funding with bad credit?

Many online lenders offer payday loans and cash advances with instant funding for bad credit, like KOHO, Nyble, Bree, iCash and Cash Money. You’ll have to pay for this service, but you should receive your funds within minutes via Interac e-Transfer. Banks, credit unions and even online lenders offering other types of loans, like installment loans, take longer to process applications and send funds.

Before applying for a loan, make sure your bank account is registered for Interac e-Transfer autodeposit so you can receive your funding instantly.

What are personal loans for pensioners in Canada?

Personal loans in Canada typically come with loan terms as short as 3 months or as long as 5 years. Although the average personal loan rate in Canada is 9.32%, interest rates can range between 6.99% for excellent credit and up to 35% for bad credit.

Eligibility requirements of personal loans for pensioners

Requirements vary a lot among lenders. Banks and credit unions require good to excellent credit over 660, while alternative lenders accept fair to bad credit under 660.

A recurring income is also a must, no matter which lender you apply to.

Types of personal loans in Canada for seniors

While it may be a bit harder to get 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. Here’s a closer look at what you can get.

• Secured loans

  If you need a larger personal loan, a secured personal loan may be your best bet, especially if you’re retired and sitting on a nest egg. Secured loans involve some sort of collateral that acts as insurance for your lender in case you default on your loan. In this case, it could be your home equity or a car that you’ve already paid off. With collateral on the line, you’ll secure the lowest interest rates and you’ll have a wider range of pension loan lenders to work with.

• Unsecured loans

  Unsecured pension loans in Canada come with higher interest rates because they don’t require any form of collateral. Without an asset acting as insurance on your pension loan, your lender will rely more heavily on your credit score and monthly income to determine your eligibility for a loan.

  Having solely your pension and OAS income won’t stop you from getting these loans from online lenders. LoanConnect, Spring Financial and Loans Canada are just some of the online lenders that fund loans to Canadians with a pension. Watch out for steep interest rates that can be on par with credit cards and payday loans.

• Personal line of credit

  A personal line of credit works almost like a credit card, giving you a specified credit limit to use however you like. While personal loans give you a lump sum of funding that you need to repay within a fixed amount of time, a line of credit stays open as long as you keep up with repayments.

  The funds are there for you whenever you need them, and interest is only charged on what you withdraw.

• Cosigned loans

  A last-ditch option for borrowers relying on just their pension and OAS income is to ask a family member or close relative to cosign on your loan application and act as a guarantor. This guarantor must accept responsibility for repaying your pension loan if you default on the payments (and their credit score suffers when repayments aren’t made on time).

Compare personal loans for pensioners

What about payday loans?

Payday loans are another realistic option if you’re looking for a loan as a senior. They’re fast and easy to get because of their lenient eligibility requirements. Many payday lenders accept pensions as a valid source of income, and they can also approve seniors with bad credit.

Can pensioners get payday loans with no credit check?

Yes, some lenders in Canada offer payday loans for pensioners with no credit check, like Cashco, Money Mart and PAY2DAY. But even if payday lenders do require credit checks, they still have lenient eligibility requirements, and you could still qualify with bad credit.

But payday loans have real downsides

It’s worth noting that payday loans max out at just $1,500 and must be repaid within 62 days. They’re also a very expensive way to borrow, with APRs over 300%, which can cause financial strain.

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 bills and 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 and paid directly into your bank account. The only way you may not get approved is if your existing debts and expenses are too high or the lender can’t verify your income or identity. If your bank statements show lenders that you may not have enough income to repay your loan, they may not approve you.

Compare payday loans for pensioners

Cash advance apps: A worthy alternative to payday loans for seniors

You don’t have to turn to payday loans if you need easy approval and quick funding. Cash advance apps give you access to a small loan without needing to go through a credit check.

They offer instant approval and funding within minutes for a fee. They also offer more flexible repayments than payday loans.

Are cash advance apps better than payday loans for pensioners?

Yes, they could be. As an example, here’s how much a $100 cash advance could cost you vs a $100 payday loan.

In this example, you save $14 by choosing the cash advance app. Keep in mind, though, that this is with standard funding, which takes up to three business days. If you opt for instant funding, you’ll pay an extra fee. Also, if you’re a first-time borrower, cash advance lenders might approve you for amounts under $80 only.

Compare cash advances for pensioners

What types of seniors’ income do lenders accept?

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 employment, some accept other forms of income, such as:

How to apply online for a pension loan in Canada

To apply for a loan online, fill out an application form with your name, contact info and income details. Depending on the lender, you may be required to go through instant bank verification so the lender can provide a quick decision.

With bank verification you connect your bank account to provide the lender with view-only access to your bank statements. If you’d rather not go through bank verification, some lenders allow you to upload or email your documents.

Required documents

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
• Collateral documentation if applying for a secured loan

Are Canadians confident in understanding loan contracts?

Before signing a contract with any lender, it’s crucial to understand the terms and conditions, especially any interest or fees associated with your loan. According to the Finder: Consumer Sentiment Survey January 2024, 3 in 10 Canadians are either not confident at all or only slightly confident in understanding loan contracts. If something is unclear to you, don’t hesitate to ask the lender for clarification.

If a lender isn’t transparent with you, that’s a red flag.

Bottom line

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

• Can I use my pension as collateral to get a loan?

  Funds in a locked-in retirement savings plan (RRSP) cannot be used as collateral, according to the Pensions Benefits Standards Act, 1985 and the Pension Benefits Standards Regulations, 1985 (BPSR). However, funds unlocked in accordance with the BPSR can be used at your discretion.

  Assets like your home equity or car are more common items used as collateral for secured loans.

• What if my pension benefits are less than the lender's minimum income requirements?

  If your pension benefits are less than the lender's minimum income requirements, you may not be eligible to apply for that specific loan. Contact the lender or find a different lender that has more lenient eligibility criteria or lower loan amounts.

• What are my options for pension loans with bad credit?

  If you have bad credit and are receiving a pension, you can get a payday loan, cash advance or online personal loan.

• Are personal loans considered taxable income?

  Unless you borrow money to purchase an investment where you'll make income, then no, a personal loan is not tax-deductible.

Written by

Carmen Chai

Writer

Carmen Chai is a freelance writer at Finder, specializing in financial products. She is an award-winning Canadian journalist who has lived and reported from major cities such as Vancouver, Toronto, London and Paris. She has reported on personal finance, mortgages, and banking products for nearly a decade. See full bio

Co-written by

Leanne Escobal

Publisher

Leanne Escobal is a publisher at Finder with more than 12 years of experience in financial products and services, with a focus on content strategy and marketing. She has completed the Canadian Securities Course (CSC®) as well as the Personal Lending and Mortgages course through the Canadian Securities Institute. Leanne holds a Bachelor of Arts (Honours) in English literature and creative writing from Western University. See full bio

Leanne's expertise

Leanne has written 175 Finder guides across topics including:

• Personal Loans
• Car Loans
• Business Loans
• International Money Transfers
• Make Money Online