Disability Loans

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1. What is a Disability Benefit Loan?
2. How Do Disability Benefits Work in Canada?
3. Where Can I Get a Disability Benefit Loan?
4. Who is Eligible for a Disability Benefit Loan?
5. Applying for a Disability Benefit Loan
6. Frequently Asked Questions About Disability Loans

What is a Disability Benefit Loan?

As your disability benefits come in known, regular and predictable installments, you can apply for and receive a loan based on them - where they are essentially treated as a form of income. In this way, a disability benefit loan is a lot like other types of income-related loans. But as disability benefits tend to be small, the loans associated with them are also on the smaller side. Most commonly, they come in the form of payday loans.

How Do Disability Benefits Work in Canada?

Canada has multiple disability benefits programs, with varying amounts, available, depending on:

• Province
• Disability (type, severity, duration, etc.)
• Age
• Employment status

• Education level
• Veteran status
• Canada Pension Plan (CPP) contributions

There are both federal and provincial benefits, tax benefits, as well as some government loan forgiveness programs for those with disabilities. As this is such a complex and ever-evolving area, Canadians are encouraged to check for the latest benefits that may be available to them here. But for an idea of the scale we’re talking about, the basic CPP disability program amount is $510.85 per month, the average is $1031.55, and the maximum is $1413.66.

Where Can I Get a Disability Benefit Loan?

So your disability benefits can count as income, but it’s important to note that this doesn’t necessarily help you get a loan from anywhere. Most lenders will take into account your disability income as just one part of your wider financial profile, but will also need you to meet credit score, financial history, downpayment and potentially other eligibility criteria before approving you for a loan.

To receive a loan on solely the basis of your disability benefits, you’ll need to look at some less traditional lenders. Your options include:

Payday Lenders

Payday lenders only need proof of income (from any source) to provide small, short term loans. Payday loan amounts range from $100 to $1500, and usually only last a few weeks. However their interest rates are very high, and so these loans (while easy to qualify for and convenient to access) are only really appropriate for emergency situations, where you know you’ll be able to pay the money back before interest becomes punitive.

Online Lenders

An alternative to payday lenders are alternative lenders such as online lenders, who sometimes offer disability benefit loans in the form of small personal loans, installment loans or lines of credit. These may be harder to qualify for than a payday loan (for example, they may need to check your credit score), but generally loan amounts are larger ($1000 to $20,000) and longer term (up to five years), and the interest rates involved are much lower. They can also come with other advantages - for example, with a line of credit, you only pay interest on what you actually use, even if you were approved for more, and you can have an open-ended loan term. So if you have the ability to get one of these loans, it will cost you less in the long term.

Who is Eligible for a Disability Benefit Loan?

To receive a disability benefit loan, you must meet the eligibility criteria of your chosen lender. These vary, but at a minimum include being able to prove:

• Age (you must be age of majority in your province)
• Canadian residency and permanent address
• Enrollment in a disability benefits program

• Income level
• Ownership of an active bank account

Some lenders may also want to check your:

• Credit score
• Credit report

• Employment status
• Other debt obligations

Applying for a Disability Benefit Loan

To apply for a disability benefits loan, you must:

1. Ensure that you are actually receiving disability benefits and can prove it.
2. Consider the loan that you need - how much, and for how long.
3. Research lenders to find options whose eligibility requirements you meet and who can offer the loan you need.
4. Compare your options; remember to take into account the overall cost of the loan (including all fees and penalties, as well as interest rate), as well as the flexibility and length of the loan.
5. Choose a lender with a loan you can afford, whose eligibility requirements you meet, and with a solid reputation.
6. Gather together the documents you need to support your application.
7. Complete an application form and submit with your supporting documents.

Frequently Asked Questions About Disability Loans

Can I get a disability benefit loan with bad credit?

Yes, usually. Not all disability benefit loans will accept poor credit borrowers, but payday loans and other forms of cash advance loan usually do not take into account credit score.

How much can I borrow with a disability benefit loan?

That depends on your exact situation and how much you receive in overall income; loans between $150 and $20,000 are in theory available.

Can I get a loan based on my provincial disability benefits?

Yes. It doesn’t matter where your benefits come from, as long as you can show you will continue receiving them.

What’s the interest rate on a disability benefit loan?

This depends on where you get your loan and the loan type. Interest rates can vary from 8% to over 500% (for the most punitive types of payday loan).

Can a lender charge me more interest because of my disability?

No, this is illegal. Your interest rate will be based on the factors in your loan application, just like everyone else.

Can I get a disability benefit loan if I am unemployed?

Yes. Receiving disability benefits counts as a form of income, so many disability benefit loans will not worry if you are unemployed - as long as you can prove your benefits will continue.

Will applying for a disability benefit loan affect my disability benefit eligibility or payments?

No. Any loan you have will have zero effect on your disability benefit eligibility and payment level.