Pension loans in Canada: Payday, bad credit & no credit check loans
Compare quick ways to borrow money, whether you're looking for personal loans, cash advances or payday loans for pensioners.
As Canadians head into their golden years, their income sources shift into government-provided benefits, such as Canada Pension Plan (CPP) and Old Age Security (OAS), and/or a private pension. If these are your primary sources of income and you’re looking for a loan, you may find your options are more limited compared to when you were actively employed. But you still have options, even if you have bad credit.
Whether you’re looking for a personal, payday loan or cash advance, there are pension loans in Canada available to seniors.
Jump to:
- Personal loans (harder to get, over $500, lower rates)
- Payday loans (easier to get, up to $1,500, higher rates)
- Cash advances (easier to get, up to $500, no credit check, no interest)
Compare personal loans for pensioners in Canada
These personal loan providers accept full-time pension as valid income. Bad credit is okay with some lenders.
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⚠️ Warning: Be cautious with payday loans
High-cost payday loans are unsustainable for long-term borrowing, with up to $14 charged per $100 borrowed. If you're experiencing financial hardship, consider calling Credit Counselling Canada for free financial counselling (Monday-Friday 8:00am-5:00pm at +1 866-398-5999). You may also want to consider payday loan alternatives.Compare payday loans for pensioners
These Canadian payday loan providers serve seniors by accepting pension income as a valid source of income. Bad credit is accepted.
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Compare cash advances for pensioners in Canada
These cash advance providers in Canada also accept pension income. You pay no interest on these cash loans, but you may pay a monthly fee. There’s also no credit check required, so bad credit is okay.
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Finder Score for cash advance apps
To make comparing even easier, we came up with the Finder Score. Interest rates, fees and features across 5+ cash advance apps are all weighted and scaled to produce a score out of 10. The higher the score the better the loan—simple.
Key takeaways
- Many lenders recognize various pension incomes, such as Canada Pension Plan (CPP), Old Age Security (OAS) and private pensions, as valid sources for loan qualification. Demonstrating a steady income stream from any of these sources can enhance your eligibility, even if you have bad credit.
- Pensioners have access to different loan types, including personal loans, payday loans and cash advances. Personal loans typically offer larger amounts with longer repayment terms and lower interest rates, while payday loans provide smaller sums with shorter terms and higher interest rates.
- To apply for a loan, you’ll generally need to provide proof of income, such as recent bank statements. Some lenders also require a credit check, while others don’t.
Where can you get pension loans in Canada?
Canadians looking for loans while receiving pension income can qualify with personal loan providers, payday loan lenders and cash advance apps. While traditional banks in Canada may also accept pension income, you’ll typically need to have good credit and a debt-to-income (DTI) ratio under 40% to get approved.
Option 1: Personal loan for pensioners in Canada
Personal loans in Canada typically come with a loan terms as short as 3 months or as long as 5 years. Although the average personal loan rate in Canada is 9.32%, interest rates can range between 6.99% for excellent credit and up to 35% for bad credit.
Eligibility requirements of personal loans for pensioners
While requirements vary from lender to lender, you generally need the following:
- Steady pension income. The lender will want to see that you have regular pension income being paid to you via direct deposit.
- Low DTI ratio. This is the percentage of monthly debts you pay out of your monthly income. You typically need a DTI under 40% to get approved. Some alternative lenders can approve a higher DTI, but they’ll charge higher rates because they’ll consider you a riskier borrower.
- Good credit score. You’ll need a credit score above 660 to get competitive rates. If your credit score is below this, you can still get approved by an alternative lender specializing in fair or bad credit loans, but be prepared for higher rates.
Types of pension personal loans in Canada
While it may be a bit harder to get a personal loan via a traditional lender with just your pension and OAS income, online lenders are readily available to offer pension loans in Canada. Here’s a closer look at you can get.
Compare personal loans for pensioners
Option 2: Payday loans for pensioners in Canada
Payday loans are another option if you’re looking for pension loans in Canada. They are fast and easy to get because of their lenient eligibility requirements. Many payday lenders accept pension as a valid source of income, and they can also approve pensioners with bad credit.
Can I get payday loans for pensioners with no credit check?
Yes, some lenders in Canada offer offer payday loans for pensioners with no credit check, like Cashco, Money Mart and PAY2DAY. But even if payday lenders do require credit checks, they tend to have lenient eligibility requirements and you may still be able to qualify with bad credit.
What you should know about payday loans for pensioners in Canada
It’s worth noting that payday loans max out at just $1,500 and must be repaid within 62 days. Payday loans are also a very expensive way to borrow and can cause financial strain.
It’s also important to ensure you have the money to make the full loan repayment when the time comes, and you’ll have enough left over to pay for other bills and expenses.
Eligibility requirements of payday loans for pensioners
You can get approved for a payday loan using your CPP, OAS or other type of pension as long as it’s recurring and paid directly into your bank account. The only way you may not get approved is if your existing debts and expenses are too high or the lender can’t verify your income or identity. If your bank statements show lenders that you may not have enough pension income to repay your loan, they may not approve you.
Compare payday loans for pensioners
Option 3: Cash advance apps for pensioners
Cash advance apps allow you to access a small loan. Depending on the lender, you repay on a strict deadline, or you can extend it if you need to. You pay no interest on these cash loans, but you may pay a monthly fee.
Cash advance apps offer instant approval. If you want funding within minutes, you can pay an extra fee to access this perk.
Are cash advance apps better than payday loans for pensioners?
They might be. As an example, here’s how much a $100 cash advance could cost you vs a $100 payday loan.
| $100 cash advance | $100 payday loan | |
|---|---|---|
| Loan amount | $100 | $100 |
| Cost of loan | 0%, no extra fee | $14 for every $100 borrowed |
| Loan term | 14 days | 14 days |
| Payment amount | $100 | $114 |
In this example, you save $14 by choosing the cash advance app. Keep in mind though that this is with standard funding, which takes a few business days. If you opt for instant funding, you’ll pay an extra fee. Also, if you’re a first-time borrower, cash advance lenders might approve you for amounts under $80 only.
Compare cash advance for pensioners
What incomes do lenders accept for pension loans in Canada?
Lenders want to see that you can comfortably pay back your loan and still pay for expenses in life such as food, housing and other debts.
While many lenders require you to be employed, lenders of pension loans in Canada will accept other forms of income such as:
- Private pensions (Sun Life, Blue Cross, Manulife, etc.)
- Canada Pension Plan (CPP)
- Old Age Security (OAS)
- Guaranteed Income Supplement (GIS)
- Ontario Teachers’ Pension Plan (OTPP)
- Personal investment or retirement income
- Other government benefits
How to apply online for a pension loan in Canada
To apply for a loan online, fill out an application form with your name, contact info and income details. Depending on the lender, you may be required to go through instant bank verification so that the lender can provide a quick decision.
With bank verification, you connect your bank account to provide the lender with view-only access to your bank statements. If you’d rather not go through bank verification, some lenders allow you to upload or email your documents.
Basic eligibility criteria
While basic eligibility criteria can vary between providers, it usually includes the following:
- Be a Canadian citizen or a permanent resident.
- Have an active bank account.
- Meet the minimum income requirements.
- Meet any minimum credit score requirements.
Required documents
Documents may include the following:
- Bank statements from the last 60 to 90 days
- Government-issued ID
- List of assets and debts if you’re applying to a financial institution
Are Canadians confident in understanding loan contracts?
Before signing a contract with any lender, it’s crucial to understand the terms and conditions, especially any interest or fees associated with your loan. According to the Finder: Consumer Sentiment Survey January 2024, 3 in 10 Canadians are either not confident at all or only slightly confident in understanding loan contracts. If something is unclear to you, don’t hesitate to ask the lender for clarification.
If a lender is not transparent with you, that’s a red flag.
Bottom line
Even if you’re no longer in the workforce, you can still apply for a pension loan in Canada. Many lenders accept OAS, CPP and private pensions as valid income, which means if you’re able to make your loan repayments and you meet the other eligibility requirements, you could be approved.
Want to learn more about loans? Head to our personal loans guide here.
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