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Payday loans with government benefits
See how payday lenders differ in what government benefits they accept.
If you receive government benefits as your main source of income, you may find your options are limited if you need a loan. But some payday lenders accept government benefits as income, including Employment Insurance, Child Tax Benefits, Disability Tax Credit, Canada Pension Plan, Old Age Security and more.
Just make sure you’re applying for legitimate payday loans with your government benefits and that you understand the drawbacks of a payday loan. Overall, payday loans should be used as a last resort because of their incredibly steep interest rates and short repayment terms.
⚠️ 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:
- 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.
Payday loans with government benefits
We checked several licensed payday sites. Here’s what they say about payday loans with government benefits.
|Payday lender||Accepted government benefits and other incomes||Serviced provinces online||Turnaround time||Funding options|
|Money Mart is flexible with income and only asks for proof of steady income, such as pay stubs or direct deposits of government-assistance benefits.||AB, BC, MB, NS, ON, SK||E-transfer within 60 minutes||E-transfer, direct deposit, in-store (120+ branches)|
|iCASH accepts employment insurance, child tax, ODSP, AISH, provincial disability, CPP, OAS, social assistance and more.||AB, BC, MB, NB, NS, ON, PEI||E-transfer in as little as 2 minutes||E-transfer, direct deposit||Go to site|
|Cash Money is flexible and accepts many types of recurring income. Examples include child tax credit, disability and unemployment. It does not accept social assistance in Manitoba.||BC, NL, NS, ON, SK||E-transfer in 15 minutes||E-transfer, direct deposit, in-store||Go to site|
|GoDay accepts CCB, disability tax credit, Old Age Security (OAS), private pensions and CPP.||AB, BC, MB, NB, NS, ON, PEI, SK||E-transfer in as little as 2 minutes||E-transfer or direct deposit|
|Mr. Payday accepts CPP, private pension, EI, WCB, CCB or non-government disability benefits. It does not accept disability income from the government.||AB, BC, ON||E-transfer within a few minutes||E-transfer||Read review|
|PAY2DAY accepts EI, CPP, Canada Recovery Benefit (CRB) and OAS. It does not accept social assistance or disability income.||ON, BC||E-transfer in 60 minutes||E-transfer, in-store||Read review|
|Speedy Cash accepts employment insurance, CCB, CPP or private pension (must be paid via direct deposit).||BC, AB, SK, NS||E-transfer in 60 minutes||E-transfer, direct deposit, in-store||Read review|
|Focus Cash Loans accepts CPP, private pension, EI, WCB, child tax credit, non-government disability benefits (government disability income not accepted).||AB, BC, ON||E-transfer in 30 minutes||E-transfer||Read review|
|Loan Express accepts child tax credit, CPP, private pension and disability income. It does not accept EI or CERB.||AB, BC, MB, NB, NL, NS, ON, SK, YK, NT, NWT||E-transfer within 5 minutes||E-transfer, direct deposit|
Maximum borrowing costs 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||$21 per $100 borrowed|
|Northwest Territories, Nunavut & the Yukon||Up to $60 per $100 borrowed|
|Quebec||Limit of 35% annual interest rate (AIR)|
Features of payday loans with government benefits
Payday loans are a convenient way to gain access to cash when you need it. While borrowers receiving government benefits need to tread carefully with payday loans, here’s a rundown of the key benefits of this type of fast financing:
- Quick turnaround time. The appeal of payday loans starts with how quickly you can gain access to your funding. Payday lenders issue funding nearly immediately after you’re approved if you apply in-store, while most online payday lenders will transfer your cash to your bank account usually within the same business day, if not sooner.
- Easy application process. Payday lenders have made it incredibly easy to apply for payday loans with options, including online, over the phone or in-person at branches across the country. Some physical storefronts are even open 24/7.
- Government benefits accepted as income. While some lenders only accept employment income to qualify for a payday loan, the ones we’ve listed accept various forms of government benefits and income from private pensions.
- Use the funds for any purpose. Once you’re approved for a payday loan, you have the freedom to use the money as you’d like from consolidating debts, paying bills or covering off a financial emergency.
- Bad credit is OK. Payday loan providers will usually accept applications from people with poor credit histories because they prioritize your income and ability to repay your loan on time over your credit score. If you receive government benefits and your credit score isn’t in great shape, you may still be able to qualify.
- Payment flexibility. Depending on the payday lender you opt to work with, you can receive your funds in cash, via INTERAC e-Transfer, loaded onto a prepaid card tied to your loan account or as a direct deposit into your bank account.
- Unsecured. Payday loans are unsecured so you don’t need to put up any collateral.
What to watch out for
Payday loans come with their fair share of notoriety. Here are the main red flags every consumer needs to take stock of before applying for payday loans with government benefits:
- Steep interest rates. The crucial reason why payday loans should be used as a last resort is their sky-high interest rates, to the tune of 400% or more. That typically translates to a fee of $15 to $25 for every $100 borrowed. This makes them far more expensive than taking on credit card debt, for example.
- Short repayment terms. There is no wiggle room with payday loans; they must be repaid by your next payday with terms capping out at 62 days at most. You’ll need to make sure you can allocate your next pay cheque from government benefits to repaying your loan without any issues.
- Caps on how much you can borrow. Most provinces cap payday loans at $1,500, so if you need more cash, this may not be your best option. Consumers in some provinces also can’t borrow more than 50% of their net income.
- Disreputable lenders. Not all lenders follow provincial or territorial laws and regulations. Check to make sure the payday lender you’d like to work with is licensed and isn’t a scam. Always choose a reputable company that has positive feedback from real customers.
What do I need for a payday loan with government benefits?
What you’ll need to qualify for a payday loan will vary slightly depending on the lender you’ve decided to work with. On the whole, payday lenders will typically ask for information such as:
- A valid government-issued ID with your name and address
- An phone number and email address to contact you
- Proof of your income (benefits letter, bank statements showing direct deposits of government benefits, copies of government benefits cheques)
- Proof of your net and gross income amounts
- Your bank account information (chequing account, routing and institution numbers)
The eligibility criteria can differ between lenders and provinces; however, the following minimum criteria will usually need to be met:
- Age. You must be 18 years of age, or the age of majority in your province or territory.
- Residency. You’ll need to be a Canadian citizen or a permanent resident, and have a valid Canadian address.
- Income. You’ll need proof that you have some form of income, whether it’s employment income, investment income, welfare or government benefits.
- Bank account. Most lenders will require you to have a working bank account. If you apply in person at a store, you may not need a bank account.
How do I choose which payday loan to apply for?
When you’re looking to apply for payday loans with government benefits, you may be inundated with choices. You should keep the following factors in mind, since they’ll vary between lenders:
Can I get payday loans with government benefits and no credit check?
While you can find payday loan providers who accept government benefits and don’t do credit checks, it’s common for lenders in Canada to check your credit. One lender that offers no credit check payday loans with government benefits, for example, is Money Mart.
However, keep in mind that if a payday loan lender checks your credit, it’s usually not the only factor they consider when assessing your application. They’ll generally be more concerned about your ability to repay the loan, which you can often prove using income from government benefits.
Compare payday loans that accept government benefits
Alternatives to getting payday loans with government benefits
Because payday loans come with such high interest, it’s important to consider other options first. A credit card cash advance, for example, can generally be much cheaper than payday loans. It usually comes with a fee of around 23%, which is much cheaper than the triple digit APR typical of payday loans. Keep in mind that interest on a cash advance starts to accumulate immediately, so the sooner you can pay it off, the less it will cost.
An installment loan is another good option if you’re looking for alternatives to payday loans with government benefits. Interest rates on installment loans in Canada can start at around 18% up to 47%. Installment loans are offered by alternative online lenders, and often come with less strict income and credit score eligibility requirements.
You can learn about many other payday loan alternatives in our full guide to the topic here.
You can apply for payday loans with government benefits. There are payday lenders that accept various forms of government benefits as income, including EI, CPP, OAS, Child Tax Benefits, Disability Tax Credit and more. Your job is to make sure the payday lenders on your shortlist accept the specific type of government benefits you receive as income to qualify. Also make sure that you have proof this is a steady source of income you can use towards repaying your payday loan.
You may also wish to consider your payday loan alternatives, which will come with better terms and more management payment options. Some of these options also account for government benefits as acceptable sources of income.
Frequently asked questions
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