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Payday loans with government benefits

See how payday lenders differ in what government benefits they accept.

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By

Carmen Chai

&

Chelsey Hurst

Updated

Fact checked

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.

Use this guide to find out where you can apply for payday loans with government benefits.

⚠️ 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 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 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 in Canada

Payday lenderAccepted government benefitsServiced provinces onlineTurnaround time
cash moneyMany types, such as CPP, child tax credit, unemployment, disability. It does not accept social assistance in Manitoba.BC, NL, NS, ON, SKE-transfer in 15 minutes
iCASHMany types, such as employment insurance, child tax, ODSP, AISH, provincial disability, CPP, OAS and social assistanceAB, BC, MB, NB, NS, ON, PEIE-transfer in as little as 2 minutes
Go to site
Money MartMoney Mart is flexible with income and only asks for proof of steady income, such as pay stubs or direct deposits of government benefits.AB, BC, MB, NS, ON, SKE-transfer within 60 minutes
Read review
Mr. PaydayCPP, EI, WCB, non-government disability benefits. It does not accept disability income from the government.AB, BC, ONE-transfer within a few minutes
Read review
Speedy CashEI, CPP, private pension, child tax credit.All provinces except Quebec and PEIE-transfer in 60 minutes
Read review

Focus Cash Loans

CPP, private pension, EI, WCB, child tax credit, non-government disability benefits (government disability income not accepted).AB, BC, ONE-transfer in 30 minutes
Read review

Loan Express

Many types, including pension, disability, child tax credit, most other government benefits paid regularly. It does not accept EI or CERB.AB, BC, MB, NB, NL, NS, ON, SK, YK, NT, NWTE-transfer within 5 minutes
Read review
Maximum borrowing costs of payday loans 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 & PEI $15 per $100 borrowed
Manitoba, Saskatchewan & Nova Scotia $17 per $100 borrowed
Newfoundland and Labrador $14 per $100 borrowed
Northwest Territories, Nunavut & the Yukon Up to $60 per $100 borrowed
Quebec Limit of 35% annual interest rate (AIR)

How to get approved for payday loans with your government benefits

  1. Compare lenders. Payday lenders differ in what government benefits they accept. Some, for example, don’t accept social assistance, while others do (learn more about loans for social assistance). Before you apply to a lender, check that your government benefit qualifies as income.
  2. Apply online. Include personal details, such as your name, email address, phone number, address, housing situation, income and payment frequency.
  3. Get a decision. Find out if you’re approved within minutes.
  4. Sign your contract. Review your contract carefully, taking into account the interest rate, repayment amount and payment schedule, and sign when you’re comfortable.
  5. Get funded. Get your money within minutes via e-transfer. If you choose direct deposit, get your money the next day.

Pros and cons of payday loans with government benefits

Pros

While borrowers receiving government benefits need to tread carefully with payday loans, here’s a rundown of their benefits:

  • Quick. Apply in less than 10 minutes, get an instant decision and get your money immediately after via e-transfer.
  • Convenient. Some payday lenders can give 24/7 approval and funding with their e-transfer payday loans.
  • Flexible requirements. Payday loans are one of the easiest loans to get. You can use your governments to qualify for a loan, and you can get approved if you have bad credit or no credit.
  • Use the money for any purpose. Once you’re approved for a payday loan using your government benefits, you have the freedom to use the money as you’d like.
  • Funding flexibility. Depending on the payday lender, you can receive your money in cash, via Interac e-Transfer, direct deposit or loaded onto a prepaid card.
  • Unsecured. Payday loans are unsecured so you don’t need to put up any collateral.

Drawbacks

Here are the drawbacks every consumer needs to take stock of before applying for payday loans with government benefits:

  • Very expensive. Payday loans should only be a last resort because you’ll pay $14 to $17 for every $100 borrowed.
  • Short repayment terms. You’ll typically repay in full by your next payday, up to 62 days. Before you apply, check that you can repay the loan on time and you’ll have enough money left for other debts and expenses.
  • Small amount. Payday loans cap at $1,500, so if you need more, this isn’t your best option. Consumers in some provinces also can’t borrow more than 30-50% of their net income.
  • Disreputable lenders. Check to make sure the payday lender is licensed. Always choose a reputable company that has positive feedback from real customers. Learn more about payday loan scams.

What do I need to get a payday loan with government benefits?

Eligibility requirements

While requirements vary between lenders, you’ll generally need to meet the following:

  • 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 permanent resident.
  • Income. You’ll need to show proof of your government benefit.
  • Bank account. Most lenders will require you to have an active bank account.

Required documents

Some lenders may not require you to send them any documents. Others may ask for the following:

  • Valid government-issued ID
  • Proof of your income (benefits letter, bank statements showing direct deposits of government benefits, copies of government benefits cheques)

How do I choose which payday loan to apply for?

When you’re looking to apply for payday loans with government benefits in Canada, keep the following factors in mind:

Can I get payday loans with government benefits and no credit check?

While you can find some payday loan providers who accept government benefits and don’t do credit checks, other payday lenders do check your credit.

If a payday loan lender checks your credit, it’s 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.

Sample of payday loans that accept government benefits with no credit check

Are there payday loans that accept CERB?

Canada Emergency Response Benefit (CERB) was government financial support given to Canadians who were directly impacted by COVID-19. CERB ended in 2020. Some payday lenders did accept CERB as valid income, while others did not.

If you’re on EI or unemployment benefits, learn more about EI loans.

Cost example: Payday loans with government benefits in Ontario

To give you an idea of how much you’d pay for a payday loan in Ontario using your government benefits, we use the following example of using the Ontario government’s disability benefit to get a loan:

Simon borrows $200 using his government benefit

Simon lives in Ontario and currently receives $1,228 per month in government disability income. He applies for an ODSP payday loan on November 3 and is approved to borrow $200. He must repay it on his next Ontario disability payment on November 30.

FeatureDetails
Loan amount$200
Cost of loan$15 per $100 borrowed = $30 (202.78% APR)
Loan term27 days
Payment amount One full payment of $230

Simon’s total loan cost is $230, which means he’ll have $998 left on November 30 once he repays his payday loan.

Before you sign a contract with a lender, make sure you’ll have money in your bank account to repay your loan and you’ll have enough left to cover your expenses until your next payday. Otherwise, you may find yourself needing another payday loan.

Check for a payday licence

Some provinces have a publicly available database of payday lenders that are licensed to operate in that province:

Alternatives to getting payday loans with government benefits

Because payday loans come with such high interest and short repayment terms, it’s important to consider alternatives first.

A credit card cash advance, for example, can be much cheaper than payday loans. It usually comes with a fee of around 23% + 5% of the amount borrowed, which is much cheaper than the triple digit APR typical of payday loans. Keep in mind that interest on a cash advance accrues as soon as you withdraw, so the sooner you can pay it off, the less it will cost.

An installment loan is another valid option if you’re looking for alternatives to payday loans with government benefits. With an installment loan, you borrow money that you pay off in equal payments over at least three months. Interest rates on installment loans in Canada can start at around 18% up to 46.96%. Installment loans are offered by alternative online lenders, and often come with less strict eligibility requirements than personal loans offered by banks and credit unions.

You can learn about many other payday loan alternatives in our full guide to the topic here.

Bottom line

There are many payday lenders in Canada that accept government benefits income from EI, CPP, OAS, Child Tax Benefits, Disability Tax Credit and more. Each payday lender decides which types of income it accepts, so check out our list of lenders that accept government benefits above to help narrow down your search. Make sure you have proof that you’re receiving benefits income regularly in order to qualify.

Since payday loans are so expensive, it’s worth considering payday loan alternatives that also accept government benefits, which come with better terms and more manageable payment options.

Loans for government benefits

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