Loans for people with a low income

Earning a low income and need a loan? There are plenty of low income loans available, from personal loans to payday loans, and you don’t even need to have good credit in most cases. Each loan has its benefits and drawbacks, so compare your options to find the right fit for you.

Jump to:

• Personal loans (harder to get)
• Cash advances (easier to get)
• Payday loans (easier to get)

Compare low income personal loans

Compare low income cash advances

Borrow up to $500 with a cash advance. You pay no interest on these loans, but you may pay a monthly fee.

Compare low income payday loans

Payday lenders accept low income. Payday loans are extremely expensive though, so only apply as an absolute last resort.

What are the best low income loans?

There isn’t a single best loan as it depends on your financial situation, but loans that work well with low income situations include the following:

Lender	Why it’s suited for low income	Accepts bad credit
KOHO	No job or income requirements	Yes
Bree	No min. income	Yes
Nyble	Min. income of $1,000/month	Yes
Loans Canada	Min. income of $1,000	Yes

How do personal loans, cash advances and payday loans compare with each other?

Personal loans, cash advances and payday loans are all viable options for people with low incomes, but they do have some differences. Compare their features below:

	Personal loans	Cash advances	Payday loans
Loan amount	$500 to $50,000	$20 to $500	$100 to $1,500
Loan term	3 - 60 months	Next pay cycle or flexible	Repay by your next payday, up to 62 days
Annual percentage rate (APR)	6.99% to 35%	0%, but you may pay a subscription fee	Typically over 300%
Turnaround time	24 to 48 hours	Funding takes up to three days or instantly for a fee	Within a few hours
Eligibility requirements	Less flexible – credit score and income requirements apply	Active bank account, recurring income	Flexible – bad credit and non-employment income accepted
Accepted incomes	Typically employment only	Any recurring income	Most incomes, though some lenders may not accept welfare
Collateral requirements	Depends on the lender, but many don’t require collateral	None	None

It’s best to leave payday loans as a last resort

While payday loans do have their benefits, there are a few key risks you need to be aware of before you get one:

• Very expensive. With APRs over 300%, a payday loan is a very expensive way to borrow money. Late payment fees can also add to the cost of borrowing, so check the fine print and consider payday loan alternatives first.
• Short loan terms. You only have a very short time to pay off your loan, usually by your next payday. Once you’ve paid off your loan, you may not have enough income remaining to cover your living expenses – which could force you to take out another payday loan and trigger a cycle of debt.
• Sketchy lenders. You’ll also need to watch out for disreputable lenders that target unsuspecting borrowers. Make sure the lender is licensed in your province and that you know how to spot a payday loan scam.

Can I get a low income loan with bad credit?

Yes, you can. However, you might not be able to get a loan from your bank. Instead, you’ll need to compare loans from online lenders and payday lenders.

Rather than focusing on your credit score, these lenders will assess your ability to repay the loan. They look for borrowers who have a steady source of income and will also assess how much existing debt you have.

Interest rates are higher for people with bad credit, so keep this in mind before applying for a loan.

Must read: Best bad credit loans in Canada

What will help me get approved for the best low income loan?

There are several simple things you can do to maximize your chances of getting approved for a low income loan in Canada:

• Get your debt-to-income ratio under 40%. Many lenders will only consider approving your application if you have a debt-to-income (DTI) ratio under 40%, so paying down your existing debt first can improve your chances of getting a loan. However, online brokers like LoanConnect can help you find a lender that accepts borrowers with DTIs of up to 60%.
• Earn income from stable employment. Employment income is better in the eyes of a lender than non-employment income as it helps make you seem like a lower-risk borrower. You’ll need to have been employed in the same job for a minimum of three months, but the longer your employment period, the better. Lenders want to see stability and that you can rely on a steady income before they approve your loan.
• Apply for a small amount. You’re much more likely to be approved if you apply for a small loan rather than a loan for several thousand dollars. The smaller the loan amount, the more comfortable a lender will be that you’ll be able to pay it off with your current income.
• Provide collateral. Offering an asset as security decreases the risk for lenders as they can repossess and sell your asset if you default on the loan. Providing collateral can also help you access a larger loan amount and a better rate.
• Get a cosigner. Applying for a personal loan with a cosigner can help you get approved and also access a better rate. If your cosigner has excellent credit, you’ll be seen as a much less risky prospect by the lender. Just be aware that your cosigner will have to pay back the loan if you can’t.
• Improve your credit. You’ll qualify for low income personal loans from a wider range of lenders if you have a good credit score. But if you have bad credit and you also have NSF transactions in your payment history, wait 60–90 days before you apply. During this period, pay down your existing debts and pay all your bills on time to build a better credit history.

Alternatives to high-interest loans when you have low income

Rather than taking on high-interest debt with a new loan, you may want to consider these alternative options:

• Visit 211.ca. 211.ca is a confidential and free service that connects you to government or community-based support.
• Consider debt relief. If you’re struggling to keep up with your debts, it may be time to consider debt relief. When you have a consultation with a counsellor, they can assess your existing financial situation and put together a plan to help you get out of debt faster. Learn more about debt relief companies.
• Reach out to friends and family. You could also consider asking a family member or friend to give you a small loan to get out of a financial bind. This can be a humbling step to take, and you’ll need to carefully manage the loan to make sure you don’t place any personal relationships under too much strain.

How common is it for Canadians to be denied a loan because of income?

In the Finder: Consumer Sentiment Survey January 2024, participants were asked to select the main factor causing a previous personal or car loan application to be denied. It turns out that 5% of respondents cited not meeting the loan income requirements as the primary reason for being denied.

To help save you the time and frustration of getting denied a loan after going through the trouble of applying, compare lenders who offer low income loans from our curated list here.

Frequently asked questions

• Where can I get small loans with low income?

  You can apply for a low income personal loan from an online lender or apply for a payday loan with an online or storefront lender. Check out our small loans guide for more information.

• How do I get a loan with low income and without a credit check?

  Many payday lenders offer no credit check loans to low income borrowers. Non-employment income is often accepted, but the lender will need to assess your ability to repay the loan before approving your application.

• How do I get a low income loan fast?

  If you need an emergency loan, the quickest way to access funds is to apply to a payday lender that offers 24/7 loan approvals. You can apply online, get approved and have the money sent to your account via e-Transfer within an hour or two.

• Can I get a debt consolidation loan if I have low income?

  It depends on your overall financial situation and the lender's eligibility requirements. The lender will need to check your income as well as your debt-to-income ratio to determine whether you will be able to repay the loan.

• What documents will I need to provide to get a payday loan with low income?

  You'll need to provide your bank account details and information about your income and employment. Some lenders will require you to provide physical documents such as pay stubs and bank statements, but others can use instant bank verification to confirm your income online.

• Can I get a loan with no income?

  Most lenders need you to have some sort of income to get approved for a loan. To get a loan with no income, consider pawn shop loans, but expect to pay high rates and fees.