Loans for part-time workers

According to Statistics Canada, around 9% of Canadians worked part-time in 2020, meaning they worked fewer than 30 hours a week. If you’re a part-time worker, you’ve probably had a tough time finding lenders that accept your employment — especially if you’ve been looking at bank loans. If you’ve been having trouble finding a lender that accepts part-time employment, consider these online loan options while you work on building your credit and making your application stand out.

Am I considered a part-time worker?

In Canada, a part-time employee is someone who works less than 30 hours a week. This could mean someone might work 10 hours per week or 29 hours a week and still be considered a part-time employee. Part-time employees also might not be able to take advantage of benefits that full-time employees enjoy, such as health coverage, paid holidays and more.

Loan options for part-time workers

There are a couple of different types of loans that part-time workers can explore: personal loans and installment loans.

Compare installment loans

Installment loans come in larger amounts and with longer terms than their personal loan cousins, though they’re generally smaller than your average personal loan. They can also come with higher rates than personal loans. You can typically borrow up to $2,000 or more and take 3 months to a few years to pay it off.

How can part-time employees get approved for loans?

While approval for a loan is never guaranteed, here are some tips to increase the chances of getting your application approved:

• Check the minimum income. You’ll need to make sure you meet the lender’s minimum income requirement. As long as you have the cash flow to support a loan payment, a lender may be more likely to approve your application.
• Maintain a low debt-to-income ratio. Some lenders care more about your debt-to-income ratio. This number shows how much disposable income you have each month after you pay off your debts, giving lenders a clear picture of what you can afford.
• Stick with your employer. The longer you’ve been employed, the more stable your finances will appear to a lender, even if you’re only doing part-time work.
• Sign up for direct deposit. Along with physical pay stubs, this will be a way for lenders to verify your income through your bank account. Stable part-time work will look good to a potential lender.
• Get in touch with the lender. This is the best way to check everything before submitting your application, and it reduces the risk of rejection if you can identify any other areas that might need working on.

Steps to take if your personal loan application has been denied

Seven ways to appear less risky to lenders

To tip the approval scale in your favour when applying for a loan, here are a few things you can do:

1. Work for a year, then apply. If you’ve been employed at the same place for at least 12 months, you’ll be considered much less of a risk. However, some lenders will only want to see 3 to 6 months of steady employment in order for approval.
2. Get a letter from your employer. It could help your application by providing a letter from your employer that confirms your employment and future work schedule.
3. Make your current repayments on time. Lenders want to see a strong credit report with little to no negative spots. Make sure you stay on top of your finances by paying your bills on time and keeping your credit score up.
4. Don’t apply for multiple loans. Lenders are able to see any credit accounts and loans that you apply for. If you apply for multiple loans, your credit score may lower a few points, making you appear as more of a risk.
5. Build your savings. If you can show evidence of savings to a lender, it may be more inclined to give you a loan, especially if it’s a car loan or another secured loan that requires a down payment.
6. Apply with your own bank. Your own bank will have more concrete evidence of your financial history than your credit file and if this history is positive, you’re more likely to be approved.
7. Consult an accountant. When you apply for personal loans, an accountant can help you keep track of your tax returns, savings and spending. In addition, having an overview of your finances can help you decide if a loan is the right move.

You might also be interested in…

• Learn more about personal loans
• Personal loans for new employees
• Your guide to small loans
• Low interest personal loans

Bottom line

While not all lenders are willing to extend loans to part-time workers, those that do care more about your ability to repay the loan. Always compare your options before you apply for a loan and be sure to check the minimum income before you apply for a loan to make sure you’re eligible. If it’s unclear, reach out to the lender and ask before you lodge an application.

Want to learn more about personal loans? View our comprehensive guide to find out how they work.

Frequently asked questions

• Can I get an auto title loan if I only work part time?

  You usually can, as long as you meet the lender’s eligibility criteria. Additionally, you normally have to own the vehicle outright, whether it’s a car, RV, boat or motorbike. You will usually need to be 18 years of age, or the age of majority in your province or territory, be a Canadian citizen or a permanent resident with a valid Canadian address and provide proof of your part-time income. You will likely also need a bank account. Check our car loans page to learn more about what you’ll need to apply.

• Can I get a mortgage with a part-time job?

  It’s possible, but you might not be able to get the best deal. With such a hefty, long-term loan, lenders are typically more comfortable to see that you’re steadily employed. You might have more luck if you take on more than one job or have spent at least two years with the same employer. Shop around for lenders and make some comparisons before settling for one.

• What is considered part-time work?

  In Canada, part-time work is usually considered to be less than 30 hours of work a week, at your main job or your only job.