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Payday Loans and Government Benefits
In Canada, there are a lot of payday lenders that offer payday loans. Many of them offer assistance to welfare recipients or those who have other government benefits in Canada as their primary source of income. Each of these different loan companies offers different amounts for cash loans at different rates. Not all of them are available in every province either. Let’s take a look at a few of the most recommended that offer payday loans with government benefits, whether you have poor credit or good credit.
iCash
A good place to start getting a payday loan when your main source of income is government subsidies is iCash. With iCash, all government subsidies and low-income individuals are accepted, and you can get an easy access loan of up to $1,500 online. The provinces where you can get loan options with iCash are:
- British Columbia
- Alberta
- Manitoba
- Ontario
- New Brunswick
- Nova Scotia
- Prince Edward Island
A great thing about applying online with iCash is that they offer instant approvals. Once your loan approval has been processed, you’ll receive the instant funding through e-transfer. They also offer the option of direct deposit, though if e-transfer loans don’t work for you.
Cash Money
One of the most popular payday loan lenders, also referred to as direct lenders, in Canada is Cash Money. They’ve been in operation since 1992 and offer loans online or in person. The amounts that they offer range from $50 to $10,000, depending on what you’re approved for.
Cash Money is one of the payday loan companies in Canada that offers funds to those who receive government benefits. Cash Money accepts government benefits from certain sources, including:
- EI (Employment Insurance), also referred to as unemployment benefits
- CPP (Canada Pension Plan)
- Child Tax Benefits
- Social Assistance
They offer funds in all provinces in Canada, and you can receive your funds via direct deposit or e-transfer. The only real province that differs from what government benefits they accept is Manitoba. In Manitoba, they don’t accept social assistance as a primary source of income.
GoDay
GoDay is another company in Canada that offers payday loans. However, they also offer short term loans. To get a loan through GoDay, you can apply online and get approval within minutes. They offer different loan amounts ranging from $100 - $1,500 and are available everywhere in Canada except for Quebec and Newfoundland and Labrador.
One downside to GoDay is you can’t get a payday loan through them if you’re on social assistance. That said, if you’re receiving government benefits, there are some that are approved. These include:
- Old Age Security
- Private Pension
- Canada Pension Plan
- Canada Child Benefit
- Disability Tax Credit
They disclose all of their fees upfront, and you can find out the cost of the loan right on their website. Once you are approved and accept the loan, you can receive your funds within one business day.
SpeedyCash
Whether you’re looking to get a payday loan online or in person, Speedy Cash is another option. You can borrow up to $1,500 instantly. That said, they don’t accept all government benefits. The ones they do accept are Employment Insurance, Canada Pension Plan, Child Tax Credits and Private Pensions. Another downside is that they only offer loans in British Columbia, Alberta, Saskatchewan and Nova Scotia.
Speedy Cash has been around since 1998 and offers payday loans, online loans, cheque cashing and other special offers.
Pay2Day
Pay2Day offers instant loans, in-person or online. If you apply online, you can get approval and funding 24/7. Otherwise, they have over 32 locations in Canada and offer 24/7 customer service. Like many other payday loan places, they don’t offer loans to social assistance recipients. They do offer loans to those who are recieving EI benefits or those who get a pension.
While Pay2Day does offer up to $1,500 online that you can receive in 1 to 2 hours, they only work with certain provinces. These provinces are British Columbia, Ontario and Nova Scotia.
Magical Credit
Magical Credit is an online loan company that offers loans up to $20,000 and approves those on all different government programs. That said, they do promote themselves as a bad credit loan company, so they’re likely to have much higher interest rates than other alternative loan companies. While they aren’t strictly a payday loan company, they do offer online payday loans as well as installment loans for those with good or bad credit.
Loan Express
Loan Express Payday Advance allows you to get payday loans online. They’ve been around for 15 years and offer online short term loans 24/7. Currently, the provinces they serve are:
- Alberta
- British Columbia
- Manitoba
- Newbrunswick
- Newfoundland and Labrador
- Nova Scotia
- Ontario
- Saskatchewan
These instant approval loans are available within minutes, and you are able to speak with someone at any time. Plus, you could be approved for funds up to $1,500.
Benefits of Payday Loans
If you’re in need of funds, there are a few different ways where payday loans can come in handy. These benefits are:
- Online applications
- Fast approval times
- Fast funding
- 24/7 funding
- No credit checks
Another benefit is that you don’t have to have a traditional income source like employment income. Many traditional loans require you to have a net income minimum that comes from employment or other approved sources. They aren’t open to government assistance income like payday loans.
Negatives of Payday Loans
If you’re considering a payday loan, it’s important to consider that payday loans do have some drawbacks as well. They may be a good solution in a pinch, but you need to make sure you're aware of the cost and the other drawbacks that go hand in hand with payday loans.
The first thing to consider when getting a payday loan is that they are short-term small loans. This means you can’t get a high loan amount, and you don’t have a long time to pay the funds back. Normally, the funds have to be paid back with interest in 1 to 3 payments.
The interest itself can be quite costly. Some payday loan lenders do offer special offers and discounts, but you have to be sure to read the fine print on these. If you don’t, then you could end up paying the full interest. Usually, with a payday loan, the interest can go up to as high as 300%. If you’re already struggling to make ends meet before you get the loan, this can be difficult to pay back. This is how many end up taking a new payday loan to pay off the last one, which creates a never-ending cycle that can become very difficult to break.
How to Apply for a Payday Loan on Government Benefits
No matter which payday loan lender you decide to go with, they require the same general information. Whether you’re applying online or in person, you need to be:
- 18 years old
- A permanent resident or Canadian citizen
You are also required to have a steady income and an active Canadian bank account. From there, it can be a guaranteed approval for certain lenders as long as you provide the correct information needed to issue the loan.
For any form of lending issued by a licensed lender, you need to provide a valid photo ID. You’ll also be required to show proof of income, your latest pay stub and bank statements. You’ll also need to provide your name and address. You may even be required to show your direct deposit information and other bank account information as well, depending on the lender. Many lenders will also require a digital loan agreement to be signed to finalize the loan. Whether you’re applying for AISH payday loans, EI loans, Social Assistance loans, or any other government benefit loans, the requirements are the same.
Getting a $300 Payday Loan on Social Assistance
Since most payday loans start between $50 and $100, a $300 loan is relatively small. This means you’re more likely to get approved for this amount than you are for higher amounts. This is because the amount you’re approved for is based on your income. If you’re on income assistance, your income is likely to be lower, meaning that it’ll be more challenging to get approved for a higher amount.
Total Cost of Payday Loans Per Province
Even though payday loans can be costly, there are regulations on the maximum amounts companies can charge. These maximum amounts vary depending on which province you live in. There are also different cooling-off periods, the amount of time you have to change your mind regarding the loan, and penalties for bounced cheques or pre-authorized payments.
| Province | Cost of Borrowing per $100 (Maximum Allowed) | Cooling Off Period (in business days) | Penalty for Bounced Payment (Maximum) |
| Alberta | $15 | 2 | $25 |
| Manitoba | $17 | 48 hours (weekends not included) | $20 |
| British Columbia | $15 | 2 | $20 |
| New Brunswick | $15 | 48 hours (weekends not included) | $20 |
| Saskatchewan | $17 | 1 | $25 |
| Prince Edward Island | $15 | 2 | N/A |
| Ontario | $15 | 2 | $25 |
| Nova Scotia | $17 | 1 | $40 |
| Newfoundland and Labrador | $14 | 2 | $20 |
Getting a Loan While on Disability in Canada
Receiving an income from disability benefits can make getting a loan challenging but not impossible. Many alternative lenders accept disability income from programs like ODSP (Ontario Disability Support Program) as the main source of income. That said, your credit score and credit history still comes into play; your form of stable income is just one component of approval. The best way to keep your credit up no matter how much money you make is to keep your revolving credit low and pay your bills on time. This will make getting a loan simpler, even if your main source of income is disability or government subsidies.
Getting a Loan While Unemployed in Canada
Getting approved for a personal loan while unemployed is simpler than you may think. It’s very common to get approved for a loan by alternative sources if you’re unemployed, as long as you have a source of established income. One of the ways you can receive an income is through government benefits. There are also other sources of income, including:
- Pension
- A Trust
- Settlement payments
- Child Support
You can also have a combination of different income sources. As long as you have proof of your income and are able to prove you can make your payments, then you’re likely to receive approval. One thing to keep in mind, though, is that your debt-to-income ratio comes into play as well. This refers to the monthly debt payments you have in relation to your monthly income. Lenders like to keep your DTI around 40 - 50%, so if your income is significantly lower than normal, you may not get approval if your DTI is higher.
Alternatives to Payday Loans
Even though it can be challenging to get a loan through a traditional financial institution, there are many different alternative lenders that will give a personal loan to you, even if you’re on government benefits. While these lenders do cost more than traditional financial institutions, they are still considered to be affordable loans; they allow you to improve your credit score while getting you the funds that you need. That said, in order for you to get a loan, they will need to conduct credit checks.
The types of loans that these lenders offer are called installment loans. Installment loans allow you to pay off your loan in equal payments over a specified period of time. They offer varying interest rates based on your credit score, and you often have the option to pay off the loan early with no penalties.
These alternative lenders allow you to apply online and receive approval within the same day. You don’t have to wait weeks as you would with a traditional lender, and you can choose to take a lower amount than the one you’re approved for. Your approval amount is just the highest amount you’re able to comfortably borrow. It’s important to keep in mind, though, that there’s usually an income minimum that’s usually around $1,200. It often doesn’t matter how you receive that income, though, as long as it’s consistent and you have proof.
Personal Loans With Spring Financial
When it comes to personal loans, Spring Financial is a great option for online loans. You can fill out our online loan applications in just a few minutes and receive your funds as soon as today. We offer personal loans ranging from $500 to $35,000 and accept all credit scores and financial situations. Some things that differ our personal loans from other lenders are:
- Rates start at 9.99%
- No fees or penalties on early repayments
- Fully online loan application process
- No long wait times
All loans with Spring Financial also get reported to the credit bureaus. This means that you can improve your credit score while making your on-time monthly payments. We also send the funds directly to your bank account through direct deposit or e-transfer. Whether you need the funds in the form of a large loan or even a small loan for unexpected expenses, medical bills, or large purchases, we’re here to help.
