What Are the Different Types of Payday Loans with Government Benefits in Canada?
There are different types of payday loans you can apply for when receiving government assistance. These include:
Child Tax Payday Loans
Child tax payday loans are loans given to those who benefit from Canada Child Benefit (CCB). CCBs are monthly payments provided by the Canadian government to help low-and middle-income families with the cost of raising children.
Child tax payday loans give you quick access to funds instead of waiting for the regular monthly payment. The repayment of these loans is simple and convenient since the loan amount is automatically deducted from future CCB payments.
Disability Income Payday Loans
Disability income payday loans are loans given to those that receive disability payments from the government, including Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI).
One major benefit of disability income payday loans is that lenders often have relaxed eligibility criteria. This makes it easy for people with disability to secure additional funding. Besides, there is no collateral required to get the loan.
Assured Income for the Severely Handicapped (AISH) Payday Loans
An AISH payday loan is offered to persons eligible for AISH, a monthly living allowance the Canadian government offers to individuals with a health condition or disability that prevents them from ever working.
With AISH payday loans, there is a high level of flexibility. These loans have less strict eligibility requirements than traditional loans, making them more accessible to individuals. Moreover, you can apply for the loan online or in person.
Ontario Disability Support Program (ODSP) Payday Loans
Some lenders offer ODSP payday loans to individuals under the ODSP program. The ODSP is a government-run program offering monthly payments to Ontario residents with substantial mental or physical impairment.
ODSP payday loans can provide quick access to cash when faced with an emergency such as a medical bill, car repair, or any other urgent need. This can be a useful option for those who may not have access to other sources of financing or who need funds quickly.
Canadian Pension Plan (CPP) Payday Loans
CPP payday loans are loans offered to beneficiaries of the Canada Pension Plan (CPP). The government introduced CPP in 2016 for eligible retirees in Canada. It is a monthly retirement pension with taxable benefits that replaces regular income at retirement.
With a CPP payday loan, borrowers can borrow up to $1,500 for almost anything, as long as it's legal. Depending on the lender's circumstances, borrowers can get a CPP payday loan via direct deposit within hours of approval.
Payday Loans for Unemployment Insurance Benefits
Payday loans for unemployment insurance benefits, also known as EI (Employment Insurance) payday loans, refer to a type of payday loan program designed to provide financial assistance to individuals who are unemployed and receiving unemployment insurance benefits.
With this type of loan, unemployed individuals can cover basic living expenses and bills during their period of unemployment. Some loan programs even offer flexible repayment options, like the ability to repay the loan once the borrower finds employment.
What Are the Basic Requirements for Getting Payday Loans with Government Benefits?
To qualify for a payday loan with government benefits in Canada, you should meet some basic requirements:
- Show proof of government benefits
- Be a Canadian citizen or permanent resident
- Be at least 18 years old
- Have an active, valid bank account
- Have a valid Canadian government-issued photo ID
Keep in mind that requirements may vary by lender and some may even have additional requirements. Hence, confirm with your lender what is needed before submitting your payday loan application.
Is It Possible to Get a Canadian Payday Loan on Social Assistance Without Credit Checks?
Yes. Finding a payday lender that offers loans on social assistance without doing a credit check is difficult but not impossible. Some lenders offer payday loans with no credit check as long as they confirm your identity and ability to repay the payday loan.
WeLoans partners with some payday lenders that accept government benefits and don't require credit checks. Simply apply for a payday loan on social assistance with WeLoans, and we will connect you to reputable loan providers that can offer you the funds without credit checks.
How Do You Apply for Payday Loans With Government Benefits Through WeLoans?
Getting a payday loan with government benefits is easy when you apply through WeLoans. Here are three simple steps to follow:
Fill Out a Loan Application Form
The first step is to fill out a loan application form. You'll be asked simple questions about your personal and financial life, and the entire process should only take you a few minutes.
Compare Offers
Upon submitting your loan application form, we will forward it to our extensive list of trustworthy payday lenders. Willing lenders will then get back to you with their offers. Compare these offers and choose the best one for you.
Receive Your Money
Upon selecting an offer, the deal is finalized, and you can receive your money. Depending on your chosen lender, this can happen as soon as the next business day.
Should You Take Out Payday Loans for Welfare Recipients in Canada?
Taking out a payday loan using government benefits is a good idea. However, just like anything else, there are some disadvantages and advantages to applying for this type of loan. Before you get started, learn about the pros and cons of getting payday loans with government benefits:
Pros
Apply Online
Most payday loan lenders operate online, meaning you can complete the application process and receive the money from the comfort of your couch.
Get Money Fast
Payday lenders usually decide within a few hours whether to approve your request and provide you with funds in the shortest possible time. This comes in handy when you have a financial emergency.
Bad Credit Considered
Payday lenders care more about your capacity to repay than your credit score. Even if you have a poor credit score, you have a good chance of getting approved.
24/7 Services
Many payday lenders allow you to submit your application anytime, whether at night, on the weekend, or during holidays.
Government Benefits Accepted as a Source of Income
Certain payday lenders accept government benefits as a source of income, meaning you don't have to be employed.
Cons
Loan Amounts Are Often Smaller
Payday loans are usually small loans. A payday loan may not meet your needs if you need to pay for a large purchase.
Expensive
Payday loans usually have higher interest rates and are a costly way to borrow money compared to other types of loans.
Short Terms
You should repay your payday loan within a few weeks (up to 62 days). If your cash flow is tight, you risk defaulting on your loan.
What Happens If You Fail to Repay the Loan?
The following can happen if you fail to repay a payday loan:
- The lender may charge you additional late fees and interest on the unpaid amount
- The lender may seek a court order to garnish your wages to repay the debt
- The lender may use debt collection agencies to collect the outstanding amount which can result in harassing phone calls, and messages
- The lender or collection agency can seize your property or assets
- The lender may approach your close loved ones (friends, relatives, etc.) to collect the money
- Late or missed payments on payday loans can negatively affect your credit score, making it more difficult for you to borrow loans in the future
If you find yourself unable to repay your payday loan, contact your lender to work out a repayment plan or seek help from a debt counselling service to avoid these consequences.
FAQ
Can I Receive the Loan Funds with e-Transfer?
Yes, you can get a payday loan via e-transfer. Many payday loan lenders offer you the option to apply online, and once approved, they will transfer the funds to your bank account using an e-transfer.
What's the Maximum Loan Amount I Can Borrow from Payday Loans with Government Benefits?
The maximum amount you can borrow as a payday loan with government benefits is $1500. However, some provinces set the maximum limit at 30-50% of borrowers' net monthly income.
Why Can't I Apply for CERB Payday Loans in Canada?
The Canada Emergency Response Benefit (CERB) is a financial support program started by the Canadian government in response to the COVID-19 pandemic. Since the program has now ended, you can no longer apply for a CERB payday loan today.