Payday loans with government benefits

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.

Payday loans with government benefits in Canada

Payday lender	Accepted government benefits	Serviced provinces online	Turnaround time
	Many types, such as EI, child tax, ODSP, AISH, provincial disability, CPP, OAS and social assistance	AB, BC, MB, NB, NS, ON, PEI	E-transfer in as little as 2 minutes	Go to siteLearn more
	Many types, such as CPP, child tax credit, unemployment, disability. It does not accept social assistance in Manitoba.	BC, MB, NL, NS, ON, SK	E-transfer in 15 minutes	Learn more
	Money 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, NT, ON, SK, YT	E-transfer within 60 minutes	Learn more
	CPP, private pension, EI, WCB and private disability benefits. It does not accept disability income from the government.	AB, BC, ON	E-transfer within a few minutes	Learn more
	EI, CPP, private pension, child tax credit.	All provinces except Quebec and PEI	E-transfer in 60 minutes	Learn more
	Accepts CCB, disability, pensions.	AB, BC, MB, NS, ON, SK	Funds will be sent in as little as 15 minutes via Interac e-Transfer	Learn more
	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, NWT	E-transfer within 5 minutes	Learn more

Where else can I apply for a loan using my government benefits?

If you’re looking for easy approval, you can apply to a car title loan, cash advance or installment loan provider using your government benefits. Car title loans have easy approval because you’re using your paid-off car as collateral. Lenders of this loan care less about your income and more about your car.

Cash advance providers such as Nyble and Bree offer instant loans. They have easy approval because their loans are small and they’re not strict about where your income comes from as long as it’s paid directly into your bank account. With cash advances, you won’t be able to borrow more than $350.

The third option is an installment loan, but this can be harder to get than a car title loan or cash advance. Installment loans don’t require collateral and have higher loan amounts, which cause lenders to be stricter with their requirements.

Must read: Easy loans in Canada

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:

• Eligibility criteria

  First and foremost, ensure you meet the lender’s eligibility requirements, especially when it comes to income. Double check that the payday lender accepts the specific government benefits you receive as forms of income. Otherwise, you may end up getting rejected on your loan application.

• Minimum and maximum borrowing amounts

  How much do you need to borrow? All payday loans max out at $1,500, but lenders can differ in how much they’ll lend to you.

• Funding speed

  How quickly do you need your cash? Some lenders aim to give you instant access to your payday loan, while others may take longer. If you’re facing a financial emergency, this may be the make-or-break factor in your decision making.

• In-person or online customer care

  Some payday lenders are solely online while others take a hybrid approach with physical storefronts and an online presence. If you prefer face-to-face customer service when applying for payday loans with government benefits, you may have to stick to a select number of payday lenders, such as Cash Money, Money Mart, Pay2Day and Cash 4 You.

• Reputation

  Steer clear of lenders that have a pattern of complaints from borrowers, have little to no online presence, have no office address or phone number, and no payday licence to operate in your province.

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

• Money Mart
• Mr. Payday
• Loan Express
• Focus Cash Loans

Must read: No credit check loans in Canada

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.

Feature	Details
Loan amount	$200
Cost of loan	$15 per $100 borrowed = $30 (202.78% APR)
Loan term	27 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.

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.

Frequently asked questions

• Do payday loans accept government benefits?

  Some payday lenders do accept government benefits as income, including EI, CPP, OAS, Child Tax Benefit, Disability Tax Credit, AISH, ODSP, Canada Recovery Benefit (CRB) and Workers' Compensation Board benefits (WCB). However, payday lenders differ in which incomes they accept.

• How much can I borrow with payday loans using government benefits?

  It depends on your financial situation. Payday loans cap at $1,500, but some provinces do not let you borrow more than 30-50% of your net monthly income. A lender may also approve you for smaller amounts if you're a first-time borrower or if your government benefit amount is low.

• I already have a payday loan. Can I get another one using my government benefits?

  If you already have a payday loan with a lender, you cannot get another one from them. You should first pay off your current payday loan and then re-apply for a new loan.

• Can I get payday loans that accept social assistance in Canada?

  Yes, there are many options for payday loans that accept social assistance in Canada. Payday lenders tend to have more lenient eligibility requirements, including around the types of income they accept. If you need to get your money quickly, check out our full guide to e-transfer loans on social assistance here.