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Pension loans in Canada

Compare your options whether you're looking for personal loans, cash advances or payday loans for pensioners.

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, payday loan or cash advance, 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.

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Compare personal loans for pensioners in Canada

The providers of personal loans below accept full-time pension as valid income.

Loan providerInterest rateLoan amountLoan termKey features
Loans Canada

Installment Loan

6.99% - 46.96%$300–$50,0003 - 60 monthsLoan search platform, largest lender network
LoanConnect

Installment Loan

8.99% - 46.96%$500–$60,0003 - 120 monthsLoan search platform, pre-approval in 5 minutes
SkyCap Financial

Installment Loan

12.99% - 39.99%$500–$10,0009 - 36 monthsExcellent service, fast approvals

Installment Loan

29.78% - 44.80% –$1,600Up to 36 monthsFast funding, easy approval
Loans Loans

Installment Loan

28.00% - 32.00% + broker fee$500–$1,0003 monthsFunding within 24 hours of approval, no credit check
Magical Credit

Installment Loan

19.99% - 46.80%$1,500 – $20,00012 - 60 monthsApproval in 24 hours, funding in 24 hours, accepts many types of income and bad credit
⚠️ Warning: Be cautious with payday loans
High-cost payday loans are unsustainable for borrowing over a continued period of time and are expensive as a means of longer-term borrowing. View payday costs and regulations by province here. 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). You may also want to consider payday loan alternatives.

Compare payday loans for pensioners

These Canadian payday loan providers service seniors by accepting pension income as a valid source of income.

Loan providerInterest rateLoan amountLoan termKey features
iCash

Payday Loan

Varies by province$100 – $1,5007 - 62 days24/7 approval and e-Transfer, accepts bad credit
GoDay

Payday loan

Varies by province$100 – $1,500Up to 62 daysInstant approval, e-Transfer, accepts bad credit
Maximum borrowing costs of payday loans per province
Always refer to your contract for exact repayment amounts and costs.
Province Max. cost of borrowing a $100 payday loan Cooling off period to cancel loan Max. penalty for returned cheque or pre-authorized debit
Alberta $15 2 business days $25
British Columbia $15 2 business days $20
Manitoba $17 48 hours excluding Sundays and holidays $20
New Brunswick $15 48 hours excluding Sundays and holidays $20
Newfoundland and Labrador $14 2 business days $20
Nova Scotia $15 Next business day (2 days for online loans) $40 (default penalty)
Ontario $15 2 business days $25
Prince Edward Island $15 2 business days N/A
Quebec Limit of 35% AIR N/A N/A
Saskatchewan $17 Next business day $25

Compare cash advances for pensioners in Canada

These cash advance providers in Canada also accept pension income.

Loan providerInterest rateLoan amountLoan termKey features
Bree

Early Pay

0% interest for cash advances but a $2.99 monthly membership fee applies, fee for express funding (varies based on advance)$20–$350Next pay cycle (61 days max.)Easy to apply, no interest, same-day funding for a small fee, no credit check

Credit Line

0% interest and no fees to access credit, optional $11.99/month membership for premium services like instant funding$30 – $15030 days, extendableInstant approval, no credit check and funding within 30 minutes with a monthly subscription
KOHO

Cash Advance

No interest but there’s a mandatory subscription fee starting at $2/month.$20–$250FlexibleEasy application, no credit check, instant access to funds

Where can you get pension loans in Canada?

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

Option 1: Personal loan for pensioners in Canada

Consider personal loans if you need financing on pension income for higher loan amounts or a longer loan term than you’d find with payday loans and cash advances.

Personal loans in Canada typically come with a loan terms as short as 3 months or as long as 5 years. Although the average personal loan rate in Canada is 9.09%, interest rates can range between 6.99% for excellent credit and up to 46.96% for bad credit.

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.

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:

Compare personal loans for pensioners

Option 2: 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.

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.

Compare payday loans for pensioners

Option 3: Cash advance apps for pensioners

Cash advance apps allow you to access a small loan to help you get through until your next payday that typically must be paid back with your next paycheque. You pay no interest on these cash loans, but you may pay a monthly subscription fee.

It’s possible to access money on the same day in some cases, often for a fee, but funding may take up to three business days in normal circumstances. These types of apps tend to be capped at $150 or $200.

Eligibility requirements for cash advance apps

These are the most basic requirements you’ll need to meet to be eligible to get a short-term loan from pay advance apps:

  • Be the age of the majority in your province
  • Have an active bank account
  • Meet minimum income requirements
  • Legal resident of Canada

Compare cash advance for pensioners

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

How do the different types of pension incomes work?

No matter what type of pension loan you’re considering, it’s helpful to understand the various types of seniors and retiree income. Here is breakdown of how some common types of pension income 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.

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

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 about pension loans in Canada

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Written by

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

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Publisher

Leanne Escobal is a publisher for Finder. She has spent over 11 years working with financial products and services, specializing in content and marketing. Leanne has completed the Canadian securities course (CSC®) as well as the personal lending and mortgages course by the Canadian Securities Institute. She has a Bachelor of Arts (Honours) in English literature and creative writing from Western University. See full bio

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