How to get a loan if you just started a new job

Starting a new job can come with upfront costs like buying work clothes or covering transportation expenses before your first paycheque even arrives. If you need a loan to cover these (or any other) costs, you may struggle to get approved because most lenders want to see that you’ve been earning income for at least three months as a sign that you can handle repayments.

Don’t worry, though, you’re not out of luck. This guide breaks down your options for a loan with a new job, tells you how to apply, and offers tips to boost your chances of approval.

Can I get a loan with a new job?

Yes, it’s possible to get a loan with a new job, but your options and approval chances depend on the type of loan and the lender’s requirements. Most lenders prefer to see at least three months of consistent employment, as this usually marks the end of a probationary period. However, some loan types have fewer employment requirements.

If you have a steady income, a good credit score, collateral or a cosigner, your chances of approval for a loan with a new job may improve. Just be prepared to pay extra in interest.

Jump to:

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

Compare personal loans for new employees

Compare cash advances for new employees

You pay no interest on these loans, but you may pay a monthly fee.

Get a payday loan if you just started a job

You can get a payday loan with a job, but these loans are very expensive and should be a last resort. With payday loans, you borrow between $100 and $1,500, which is repaid on your next payday. Payday loans have more lenient requirements than personal loans, so it’s easier to get one with a new job, but keep the high cost in mind.

Related: Guide to loans with no employment verification

How long do I have to work to get a loan?

Lenders usually want to see at least three months at a new job because this is the typical length of a probationary period. However, some lenders are more flexible than others when evaluating applications. Your employment history is just one of several factors that they look at, and if you’ve been working at your new job for less than three months, then lenders may place more weight on other factors. If you have a good credit score and a low debt-to-income ratio, these can help you get approved.

Can I get a loan with a job offer letter?

It might be possible as long as you have another source of income, such as rental income or government benefits. This could help you qualify for a larger loan amount, since you have proof that your salary will increase. However, it likely won’t help you get a loan if you currently don’t have any regular income.

Can I get a loan if I’m temporarily employed?

It’s possible to get a loan if you’re working a temporary job. However, some lenders might not be willing to work with you unless you have another job lined up or another source of income. It can help if you’ve consistently worked in the same field for at least a few years. This shows that you can consistently bring in income, even if you don’t have a traditional full-time job.

You may also want to consider urgent emergency loans if you need money quickly for something like rent. While many of the options you’ll have available to you are expensive short-term options, if you know you’ll be employed soon, they can be useful.

What do lenders consider?

Lenders look at a variety of eligibility factors, which can include any of the following:

• Your age. Lenders don’t base credit decisions on your age, but you usually need to be at least 18 years old, or the age of majority in your province or territory, in order to be eligible to apply.
• Employment type. You may need to be employed full-time, and you may need to earn a certain amount of income to be eligible. Some lenders don’t accept part-time or freelance work as sufficient employment.
• Debt-to-income ratio. Lenders like to see that you have a steady stream of cash coming in. A general rule of thumb is that your debt should take up no more than 40% of your income, although lower is better.
• Job title. Lenders may use your job title to cross-reference with your salary and to also predict how likely you are to default on loan repayments.
• Credit history. Banks and credit unions will normally require that you have good credit. However, there are bad credit personal loans available.
• Housing situation. Many lenders tend to prefer homeowners over renters.

How to apply for a loan with a new job

If you’re ready to apply for a loan with a new job, follow these steps.

1. Compare loan options

Even if you’ve just started a new job, you still have access to several types of loans, such as secured loans, lines of credit, cosigned loans, cash advances and lines of credit. Each comes with different requirements, so it’s important to compare your options and choose one that matches your financial situation.

2. Calculate what you can afford

Before you apply for a loan with a new job, calculate how much you can realistically afford to borrow and repay. Use an online loan calculator to estimate your monthly payments based on different loan amounts and interest rates. This will help you avoid overextending yourself financially, especially during the probationary period at your new job.

3. Gather the required documents

To streamline the application process, gather the following information:

• Your personal details. This includes your full name, date of birth, address, email address, phone number and Social Insurance Number (SIN).
• Your employment details. You may need to provide your employer’s name and contact information.
• Your income details. You may need to submit pay stubs or bank statements to provide proof of your income.
• Your banking details. You’ll need to provide the name of your bank, the branch address and transit number and your own personal bank account number.

4. Apply for pre-approval

Some lenders offer pre-approval, which can give you a better sense of your eligibility without affecting your credit score. This can help you narrow down your options and avoid unnecessary hard credit checks for loans you won’t be approved for.

5. Submit your loan application

When you’re ready to apply for a loan with a new job, you can typically do so online. The application process is usually straightforward and can take anywhere from a few minutes to about 30 minutes, depending on the lender. After you submit your application, approval times can vary—some lenders offer instant decisions, while others may take a few days to review your information and finalize the loan offer.

6. Review the loan terms and accept

Once approved, take time to thoroughly review the loan agreement. Make sure you understand the interest rate, repayment schedule, any fees involved and whether there are penalties for early repayment. If anything is unclear, ask questions before you sign.

Tips for getting approved for a loan with a new job

If you’ve just started or are about to start a new job, try to keep these factors in mind when filling out your loan application.

• Apply for a lower amount. Lenders may be more hesitant to approve you if you haven’t been at your job long. Calculate how much you need and borrow the minimum amount.
• Offer security. A secured loan is less risky for a lender, and you may be more likely to be approved. Keep in mind you may lose your collateral if you can’t make your repayments.
• Apply with a cosigner. Do you have an employed friend or family member who’s willing to cosign your loan application? This could help you get approved. Be aware that both of your credit scores will be impacted, and your cosigner will be responsible for repayment if you default.
• Wait to apply. Even a few months of work could give you a better chance of being approved. Wait until your probationary period is up to show you have a steady source of income.
• Meet the other minimum requirements. Lenders have a range of basic eligibility requirements you need to meet that extend beyond employment.
• Check your credit history. If you aren’t sure what’s on your credit file or what your credit score is, it’s worth checking before you apply.
• Provide as much supporting documentation as possible. If you have any assets or savings, you should provide that information with your application as this increases the lender’s trust that you can repay your loan.
• Talk directly with the lender. Contacting your lender before you apply can help you understand the specific criteria you’ll need to meet if you want to have a good chance at approval.

Compare lenders & apply now

Bottom line

Getting a personal loan is difficult when you need a loan but have only just started a new job. While not all lenders accept those who have been employed for less than three months, there are plenty of online lenders out there who can finance your loan.

Frequently asked questions

• Can a new company apply for a loan?

  Yes, but not all lenders cater to startups. Most require that you've been operating for at least six months to a year, but some business lenders put more weight on factors like your personal credit score, investor interest and business revenue. Other options for startups include merchant cash advances, secured business loans and government grants or loans for entrepreneurs.

  Related: Explore startup business loans in Canada

• Can I get a payday loan if I just started my job?

  Yes, it's possible. There are many different new job payday loans available, but be aware that this option will typically cost more than a personal loan and maximum borrowing amounts are rather low. With a payday loan, you face excruciatingly high interest rates and short repayment terms.

• Can I get a loan with a new job and bad credit?

  Yes, it's possible to get a loan if you're newly employed and have bad credit, but you'll only get approved for higher interest loans.