Compare loans for retirees

Retired but looking to take out a loan? Learn about the financing options available to you.

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As you reach retirement, your lifestyle changes and so do your finances. Your income will likely consist of CPP, Old Age Security (OAS) and any private pension and/or investment income you have. But what happens when it’s not enough and you need a loan? You may find that most lenders require you to be actively employed – but there are some lenders willing to work with an alternate source of income such as a pension.

Compare personal loans for people receiving a pension

Before applying for a loan, it’s best to double check with a provider to see if they consider CPP, OAS and/or private pensions as a form of income.

Name Product Interest Rate Max. Loan Amount Loan Term Fees Min. Credit Score Link
Cash Money Installment Loan
46.93%
$10,000
6 months - 5 years
Vary across provinces/territories
560
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Cash Money offers installment loans up to $10,000 for AB, MB and NB residents.
Cash Money Line of Credit
46.93%
$10,000
6 months - 5 years
Vary across provinces/territories
N/A
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Cash Money offers line of credit loans up to $10,000 fo AB and ON residents.
Fairstone Personal Loan (Unsecured)
26.99% - 39.99%
$20,000
6 months - 5 years
None
560
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Fairstone offers unsecured personal loans up to $20,000
Fairstone Personal Loan (Secured)
19.99% - 23.99%
$35,000
3-10 years
Varies by province
560
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Fairstone offers secured personal loans up to $35,000.
LendDirect Personal Loan
19.99% - 46.93%
$15,000
No end dates
None
560
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Borrow up to $15,000, based on your income and credit history, with a personal line of credit from LendDirect.
LendingMate Personal Loan
43% (British Columbia and Ontario) and 34.90% (Quebec)
$10,000
1-5 years
None
700
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LendingMate offers loans to Canadians with poor credit with no credit checks. Guarantor required for application.
LoanConnect Personal Loan
10.00%-46.96%
$50,000
6-60 months
No application or origination fees
N/A
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LoanConnect is an online broker that matches borrowers to lenders offering loans in amounts from $500 to $50,000. Get approved for multiple loan offers from different lenders in as little as 60 seconds with any credit score.
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Compare up to 4 providers

What types of retirement situations are considered?

  • Self-funded retirees. If you earn income from investments, such as rental properties, or a private pension, you’re a self-funded retiree. When applying for a loan, make sure you have as much proof of your assets and income as possible to prove to the lender you’ll be able to manage the loan repayments.
  • Retirees receiving CPP and OAS. Be sure to check the eligibility criteria of the lender – not all consider CPP and OAS as a form of income. Having a private pension on top of CPP and OAS will help prove that you can manage repayments.
  • Retirees who work part-time. If you have steady employment – even if it’s only part-time – this income will be considered by lenders. Remember minimum income criteria may apply, so check this before submitting your application.

What types of income are acceptable?

When you borrow money, having a form of income is necessary since you have to be able to prove that you can pay back the loan. Lenders want to see that you can comfortably pay back your loan and still pay for necessities in life such as food, housing and utilities.

Sources of acceptable income may include:

What forms of pension income is considered by lenders?

  • CPP. 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.
  • Old Age Security (OAS). Old Age Security provides additional retirement income to people of a certain age after they retire from their careers.
  • Private pensions. You may have also contributed to a private pension, either through your job or into a private RRSP. You’ll still receive both CPP and OAS in addition to being able to withdraw from your private pension.

There are a few lenders who will consider these benefits as a form of income when evaluating your ability to repay a loan.

Different loan types available to retirees

There are a few different types of loans available to retired seniors, including:

  • Secured personal loans. Secured loans require you to provide some form of collateral – like a car or equity on your home – and in return you’re usually able to obtain a lower interest rate. Providing collateral makes you a less risky borrower, however your collateral can be taken from you should you fail to make your repayments.
  • Unsecured personal loans. You don’t have to attach an asset to an unsecured loan, and you can use this loan type for any legitimate purpose. However, since it’s a riskier type of loan, you usually won’t get as low an interest rate as you would on a secured loan.
  • Peer-to-peer loans. Peer-to-peer loans are funded by regular investors rather than banks or institutional lenders. An online marketplace will connect you with lenders who may finance your loan. You can usually get competitive interest rates and favourable loan terms.
  • Car loans. If you’re looking to purchase a new or used vehicle, you can consider a car loan. These types of loans offer competitive interest rates because the vehicle you purchase is used to secure the loan.
  • Reverse mortgages. Reverse mortgage loans offer you a line of credit or lump sum payment by borrowing against the equity in your home. But be warned: this is a high-risk form of borrowing, as you can quickly lose equity in your home.
  • Short-term loans. If you have bad credit or need money quickly, a short-term loan might be worth considering. Also known as payday loans, these types of loans are famous for their excruciatingly high interest rates and their relaxed eligibility criteria.
  • Bad credit loans. There are still personal loan options if your credit is less than perfect. Some lenders will offer loans up to $5,000 or more to those with bad credit. Keep in mind you will often pay high interest rates with bad credit loans, since you’re considered a riskier borrower.
  • Debt consolidation loans. If you’re looking to consolidate your debt from multiple places into one single place, some loan options are specifically tailored for the purpose of debt consolidation.

Linda and Grant, a retired married couple

loans for retired peopleAs a couple, Linda and Grant receive $1,500 in retirement income each month. They’ve paid off their house and have a small source of additional income from a rented-out investment property. While their payments are enough to support their lifestyle, they don’t have the means to make additional larger purchases. When their car stopped working, they considered taking out a loan to buy a replacement.

Option 1: They looked into an auto title loan to purchase a vehicle. Since an auto loan is a secured loan, they found they could get a competitive interest rate.

Option 2: They also looked into an unsecured loan option so that their car couldn’t be taken away in the event they fell behind on loan repayments. They looked into peer-to-peer loans, which can also come with competitive interest rates.

Ultimately, Linda and Grant decided on a peer-to-peer loan because they felt more comfortable borrowing money without having to attach collateral.

Fairstone Personal Loan (Unsecured)

Fairstone Personal Loan (Unsecured)

From

26.99 % APR

rate

  • Borrow from $500
  • Free online loan quote within minutes
  • Quick application process

Fairstone Personal Loan (Unsecured)

Apply today to get approved for a small to medium personal loan up to $20,000.

  • Max. loan amount: $20,000
  • Loan term: 6 months - 5 years
  • Processing time: < 1 day
  • APR: 26.99% - 39.99%
  • Fees: None
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How to apply for a loan when you’re retired

Once you’ve compared lenders that accept pension, OAS and/or investment income as forms of acceptable 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 loan in the table above by clicking the green ‘Go to site’ button, where you’ll be securely redirected to the application page.

Bottom line

Even if you’re no longer in the workforce, you can still apply for a loan as a retiree. Many lenders accept investment income, OAS, CPP and private pensions as forms of acceptable income, which means if you’re able to make your loan repayments and you meet the other basic eligibility requirements, you could be approved for the funds.

Want to learn more about loans? Head to our personal loans guide here.

Frequently asked questions

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