Loans for CPP recipients: No credit check options available

If you’re one of the 6.2 million Canadians receiving the Canada Pension Plan (CPP) every month, you can still qualify for a loan with select lenders who accept CPP as a valid source of income. Available options include no credit check CPP loans and payday loans that accept CPP disability income.

Read this guide to find these lenders and learn how to spot a scam.

• Personal loans (within 24-48 hours)
• Cash advances (up to 3 days or instantly for a fee)
• Payday loans (instant)

Compare personal loan providers that offer CPP loans

If you have fair or bad credit, you can still get approved for one of the CPP loans below.

Compare cash advance providers that offer CPP loans

These cash advance providers offer small instant loans that are easier to get than traditional personal loans. You pay no interest on these cash loans, but you may pay a monthly subscription fee. Before you apply for a CPP payday loan, be sure to consider alternatives because payday loans are extremely expensive with short repayment terms.

Compare CPP payday loans

You can apply and get approved instantly for a payday loan using your CPP as income. Payday loans are extremely expensive though, so only consider it as a last resort.

What are CPP loans?

When you apply for a CPP loan, you use your pension (CPP retirement pension or the CPP disability benefit) to show lenders you receive a sufficient enough income to repay a loan. This helps you get approved for financing. CPP loans you can apply for include personal loans, cash advances and payday loans.

You can get a CPP payday loan for up to $1,500, which you’ll pay back in full the next time you receive your CPP payment, whether that’s the CPP retirement pension or CPP disability benefit. If you live in Alberta, however, you must repay your CPP payday loan in installments.

Can I get CPP loans with no credit check?

You can get CPP payday loans and other types of loans with no credit check, but make sure you apply to a legitimate lender. Besides payday loans, some cash advance app lenders — like Bree and Nyble — offer small loan amounts with no credit check and accept CPP income.

Illegitimate lenders also often advertise “no credit check” as part of their scam. A legit lender that doesn’t do credit checks will be registered and will still evaluate your ability to repay your loan by verifying your income.

Dive deeper: Learn more about no credit check loans

Can I get get a loan using CPP disability income?

Yes, it is possible to get a loan while on CPP disability from lenders that accept CPP as income. You’ll still have to meet all basic eligibility requirements, like ensuring you receive at least the minimum amount of CPP, to qualify. Some examples of lenders that accept CPP disability income are iCash and Nyble.

Am I eligible for CPP loans?

While eligibility requirements vary from lender to lender, you can count on the following as the minimum requirements for loans that accept CPP:

• 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 a permanent resident.
• Income. You’ll need proof of your CPP retirement pension or CPP disability benefit. You can provide proof via bank statements.
• Bank account. Most lenders will require an active bank account.
• Contact information. You should have a valid phone number, email and home address.

How do I apply for CPP loans online?

These are the typical steps you’ll need to follow to apply for a payday loan online:

1. Pick a licensed lender and check that you meet its eligibility requirements. Make sure the lender accepts CPP as a valid source of income and that your income meets the monthly minimum.
2. Follow the application prompts. Provide information about yourself, including your full name, contact details and Social Insurance Number.
3. Fill in details about your income, including how much and how often you’re paid. You’ll need to receive direct deposits for your CPP payments or have a benefits letter detailing your regular CPP payments.
4. Enter your bank account details and agree to electronic transfers.
5. Keep in mind, you can also apply in person if the payday lender you’d like to apply to has a physical storefront near you.

How do I get my CPP loan money?

CPP loans can be funded in various ways, such as the following:

• Interac e-Transfer.
• Direct deposit.
• Cash, if you’re applying in-person at a physical storefront.

If you apply online for a CPP loan, you can receive your money via e-Transfer or direct deposit. If you opt for an e-Transfer payday loan, you’ll need to be registered for e-Transfer with your bank first. With e-Transfer, your lender will email you a money transfer link, which you click on to deposit the money into your bank account immediately.

Direct deposits are automatically deposited straight into your bank account with the account information (chequing account number, routing number and institution number) that you provided on your application. This is slower than an e-Transfer.

With an e-Transfer, you can get your money within minutes after approval, while direct deposit can take up to 24 hours.

How do CPP payday loans work?

Payday loans come with these key features:

• Use the funds for any purpose. From paying down debts to covering everyday expenses, you can use your payday loan for just about anything as long as it’s legal.
• Steep interest rates and fast payback. With a borrowing fee between $14 to $17 for every $100 borrowed and terms up to 62 days, expect an annual percentage rate of over 300%, making payday loans one of the most expensive ways to borrow.
• Bad credit is okay. With this type of loan, lenders focus on your income and ability to repay the loan instead of your credit score.
• Unsecured. Payday loans don’t require any collateral.
• Quick. You can get a payday loan in as little as 30 minutes.

Dive deeper: Best payday loans in Canada

Is a CPP payday loan right for me?

Payday loans come with notoriety for good reason. Here are the main risks to take stock of before signing up:

• Disreputable lenders. The payday lending space is rife with scams. Choose a legitimate payday lender that is properly licensed.
• Short repayment terms. You typically have to repay your loan by your next payday. If you don’t, you’ll be charged fees. Quick terms may keep you in debt if you don’t have a solid exit plan.
• Potential to trigger a cycle of debt. When you repay a payday loan, make sure you’ll have enough income left over to pay for other debts or expenses. Otherwise, you might feel the need to take out another payday loan to cover the shortage.

Watch out for scams and predatory lenders

Because payday loans are typically marketed to people desperate for financial assistance but can’t qualify for conventional loans, you may come across illegitimate lenders. Beware of these scams and predatory practices:

• Illegally high interest rates or fees. Make sure the amount the lender is charging you is in line with the payday loan regulations of your province.
• Requiring payment upfront. Lenders that ask you to pay an advanced fee or pay processing, administration, insurance, credit protection or origination fees as a condition of loan approval are operating a scam.
• Guaranteed loan approvals. Guaranteed payday loans may sound like an easy way to borrow money, but there is no such thing as a guaranteed payday loan. While CPP payday loan lenders are pretty lenient with their eligibility requirements and will accept poor credit scores, they still have other criteria you must meet.
• Identity theft. Unlicensed lenders sometimes sell personal financial information to third parties, which could potentially lead to identity theft or a hacked bank account.

How to protect yourself as a borrower

Before proceeding with a payday loan application, do your due diligence by following these steps:

• Check for the lender’s provincial payday lending licence. Under provincial Payday Loans Acts, payday lending businesses must obtain valid payday loan licences. Legitimate lenders will prominently display their licences in the provinces they operate in on their websites and as a prompt before borrowers proceed with their application.
• Check that the lender is following provincial fee regulations. Get familiar with your province’s payday loan regulations, including how much lenders can charge per $100 borrowed. Stay away from lenders who charge more than what’s legally permitted.
• Compare multiple payday loan providers. It may be difficult to gauge the legitimacy of one CPP payday loan website by itself, but you may be able to spot red flags when you look at multiple websites and draw comparisons between them.
• Look for information and reviews online. Negative information (or even the lack of information) online can point to a payday loan scam. Always check for reviews, accreditations, contact information and head office locations.
• Be wary of unsolicited phone calls or emails. Steer clear of lenders that reach out to you with an attractive loan offer that you need to pay a fee to get.

Dive deeper: Avoid these payday loan scams

Alternatives to CPP payday loans

If you’re worried about the risks involved with taking out a CPP payday loan, you have other options. Here are some programs and loans you might want to check out.

• Installment loans. These types of loans are for small amounts of money, but you repay in installments as opposed to one lump sum like a payday loan. Learn more about the best installment loans.
• Lines of credit. With a line of credit, you can borrow up to a limit and only pay interest on the amount you borrow. It’s a decent alternative because of its open term, but you should aim to pay off the balance as fast as possible.
• Credit card cash advance. Since CPP payday loans are so expensive, getting a credit card cash advance may be a cheaper option. Cash advance fees typically cost around 24%, which is much cheaper than the over 300% APR of payday loans. Keep in mind, it’s important to pay off your credit card cash advance as quickly as possible since it starts accruing interest immediately.
• Credit counselling. If you’re struggling with your personal finances, you might want to consider enrolling in a credit counselling program. Start with the Credit Counselling Society or Credit Counselling Canada, two national non-profit organizations dedicated to helping Canadians get out of debt. Each non-profit has local chapters across Canada, too.
• Provincial assistance programs. From child benefit programs to income assistance and disability assistance, there are provincial programs that can help lower the cost of everyday expenses for residents and newcomers who are struggling to make ends meet.

Bottom line

If you’re retired and need quick access to cash, the good news is there are plenty of payday lenders that will accept your CPP as income. Tread carefully, though: payday loans are pricey, with quick repayment terms. Make sure you have a plan to repay the debt without staying in the red. If you don’t think that you can pay back your loan on time, consider your payday loan alternatives, which will often come with better terms and more manageable payment options.

Frequently asked questions

• Can I borrow from my CPP?

  While you can use the monthly income from your CPP to qualify for a payday loan, you can't borrow from your CPP. Instead, CPP is paid out to you in a monthly sum alongside Old Age Security, your private pension and other applicable government benefits to help you with expenses upon retirement. You can get a payday loan using your CPP retirement pension or CPP disability benefit.

• Is it easy to get a CPP payday loan online?

  It's easy to get a payday loan online. Most CPP payday loan lenders ensure their application process is convenient to fill out online wherever you have an internet connection. Simply provide your contact information, personal details and income verification.

• Can I cancel a CPP payday loan?

  Yes. Check the payday loan regulations of your province. Depending on where you live, you can cancel a CPP payday loan within one to two business days of getting it.