How Do You Qualify For An Unemployment Loan?
Join millions of Canadians who have already trusted Loans Canada
Whether you’ve lost your job due to cutbacks or COVID-19, left for personal reasons, or you’re just waiting for your next career path to come along, being unemployed can definitely put you in a tough financial situation. When that happens, you may start asking yourself; can I get a loan if I’m unemployed?
Yes, you can. In fact, there are plenty of lenders in Canada that now offer short-term unemployment loans to jobless credit users struggling with debt. That’s right, if your application is approved, a lump sum of cash will be deposited into your bank account, which you can use for almost any expense that comes your way.
Obviously, one of the best things about unemployment loans is http://www.paydayloanstennessee.com/ that you don’t need a job to qualify for financing, which other credit products may require you to have. That said, there are a few personal and financial criteria that you’ll need to be eligible, such as:
- Income – You must still be earning enough money to cover your loan payments. Acceptable forms of basic income include welfare, unemployment insurance, the Canadian Child Benefit, your pension, or other government benefits.
- Decent Credit – A few negative marks on your credit report isn’t always a deal-breaker. However, bad credit, a history of missed payments, or a recent bankruptcy can limit your options, increase your interest rate, or get you denied.
Required Documents may include (but aren’t limited to):
- Government photo identification (passport, driver’s license, etc.)
- Your latest bank statements (proof of income & active bank account)
- Your Social Insurance Number (SIN)
- A utility bill or other proof of your address
- A pre-authorized debit form or VOID cheque
Types Of Unemployment Loans
There are a few types of loans you can get while on government benefits including employment insurance, CCB benefits, social assistance, and disability assistance income.
Unemployment Payday Loans
Payday loans for the unemployed on benefits can be found in many parts of Canada. In fact, you could find a payday loan while on unemployed benefits in Ontario, Alberta, BC or any other province for that matter. However, getting a payday loan while on unemployment benefits in Quebec can prove difficult due to their lending laws. In Quebec, payday lenders can only charge an apr of 35%, which is why many payday lenders do not operate in Quebec.
Regardless, payday loans are one of the easiest loans to qualify for while unemployed. The reason being, many accept non-traditional sources of income including employment insurance (EI), CCB, social assistance, CPP and disability assistance. Moreover, it generally does not require credit checks. This makes payday loans a good option for those who are looking for quick cash and have poor credit. However, it’s important to remember that there are numerous risks associated with payday loans including high interest rates, short-terms and the possibility of getting trapped into a payday loan cycle.
Cost Of Payday Loans By Province
The maximum a lender can charge you per $100 borrowed varies by province. Here is the maximum your lender can charge you:
- Ontario, British Columbia, New Brunswick and Alberta – $15 per $100 borrowed
- Manitoba and Saskatchewan $17 per $100 borrowed
Unemployment Installment Loans
There are lenders in Canada who offer installment loans to those who are unemployed whether due to a disability, an injury, pregnancy or simply because their work had to let them go. Generally, these installment loans will have higher rates and lower term lengths and amounts due to the added risk they take by lending to someone who is considered risky. Installment loans are typically a better choice than payday loans as they have longer terms and lower rates, making them more affordable.