Can I Get a Loan While on EI? An Important Guide

Life throws curveballs at you regardless of your current situation. So, even if you’ve recently experienced job loss and difficult financial circumstances leading you to seek Employment Insurance (EI), you might still be in dire need of a loan.

So, this might lead you to ask “can I get a loan on EI?”

Although it often seems like everything is working against you, you can qualify for a loan on EI and slowly dig yourself out of a hole!

How, you ask? Let’s find out!

Can You Get a Loan While on EI?

We know the dilemma – EI is not a traditional source of income, so how can you even qualify for a loan without an actual job?

Well, the Government of Canada does consider EI a real source of income, proven by the fact that your benefits are taxable income, just like the pay you’d get from any other job.  

So even though getting approved for loans on Employment Insurance seems farfetched, it’s easier than you imagine. However, that doesn’t mean that any lender will accept a borrower on EI, so it’s essential that you do thorough research. 

Generally, people on EI opt for payday loans, as they are easiest to qualify for and have more lenient requirements. But payday loans are not the only ones you can get on EI, so let’s talk about it. 

And if you’re not working due to disability, check out your loan options here.

person taking out a loan

Types of Employment Insurance Loans

Luckily, Canadians on EI aren’t as restricted as one would think. Although you won’t have all the options of someone who has a traditional and steady income source, you won’t be left for dead, either. 

In fact, you can try your hand at the following:

Payday Loans

If you want to take out payday loans on EI, you’ll be able to access up to $1,500 at a time. Then, on your next payday (in 1 to 4 weeks), you’ll have to repay the money. Essentially, this is where these loans got their name!

However, since payday loans provide funding for even the most disadvantaged borrowers, they come with high rates, sometimes even up to $25 for every $100 borrowed. Although this mainly depends on the province, you can end up paying $250 more than what you originally borrowed. 

Here’s the maximum cost of a $100 payday loan by province:

Province Maximum Cost per $100 Borrowed Cool-Off Period
Alberta $15 2 business days
British Columbia $15 2 business days
Manitoba $17 48 hours
New Brunswick $15 48 hours
Newfoundland and Labrador $21 2 business days
Northwest Territories $60 N/A
Nova Scotia $19 Next business day
Nunavut  $60 N/A
Ontario $15 2 business days
Prince Edward Island $25 2 business days
Quebec 35% 2 business days
Saskatchewan  $17 Next business day
Yukon $60 N/A

To apply for payday loans for Employment Insurance, look for lenders who specifically say that they accept EI as income and apply either online or in-store. Ensure you have documents to prove that you do receive EI.

Installment Loans

If payday loans are not as affordable as you’d like, you can opt for a cheaper option like installment loans. If you qualify for installment loans on EI in Canada, you’ll access lower interest rates and a longer term, making it easier for you to repay the loan without an issue. 

Now you might notice that installment loans come with a myriad of requirements, more than those with payday loans. However, this is balanced out by the flexibility that installment loan lenders offer in contrast to payday lenders. 

Although many lenders accept EI for installment loans, they will most likely ask for your credit report to ensure your credit utilization ratio allows for new loans and you’re not overextended as is. 

Personal Line of Credit

Believe it or not, some lenders will allow you to get a personal line of credit despite being on Employment Insurance. What’s good about this option is that your interest is only charged on the amount you use and not the whole loan. 

This type of EI loan allows you to re-access the funds during your repayment period, which will come in handy when you’re caught without any money during your loan term. Plus, you can pay back the money you owe at any time during the life of the loan, without penalty fees

Car Title Loan

Another available loan on EI is the car title. Usually, these loans are not difficult to get as lenders have collateral – the car itself. So, it’s not risky for the lender to lend even to borrowers with a poor credit score or non-traditional types of income like the EI

But why are lenders so quick to lend car title loans? Well, if a borrower defaults on the loan, the lender can recoup the payments by taking the collateral. But keep in mind that these loans have high interest rates and short terms, which might make it harder for you to repay the amount you owe. 

How to Apply for an EI Loan in Canada?

As we already mentioned, a traditional financial or lending institution may be apprehensive or outright refuse to lend money to a borrower dealing with unemployment, a lower credit score, or a fluctuating income stream. 

That’s why we implore you to take your business to a specialized lender who accepts non-traditional sources of income and doesn’t discriminate between varying credit profiles. 

To maximize your chances of getting accepted for a loan on EI, follow these 3 crucial steps:

  1. Evaluate your finances – before approving your loan, lenders will consider your debt-to-income ratio, your income, credit history, credit score, and other factors affecting your finances. Therefore, it’s imperative that you review your financial standing before reaching out to lenders because you’ll know who you have a chance with before taking a hard credit inquiry. 
  2. Compare quotes from lenders – before picking a lender, get a few quotes and compare multiple offers so that you understand what you want and what you can get in terms of rates and fees. To do so, use one of the many loan comparison platforms and get numerous offers with one application. 
  3. Get the loan – if you found your ideal (or almost ideal) lender, you’re ready to strike a deal. You may be instructed to send over some additional information for the application after which the lender will transfer the funds. 

And that’s all there is to the application process. As you see, it’s as easy as it gets!

Applying for an EI Loan With an Alternative Lender

So far, we’ve gone over the types of loans and the application process, but we haven’t touched on why you should consider an EI loan with an alternative, non-traditional lender. 

So what can you expect?

  • Convenience – the simple and straightforward application process makes EI loan lenders a convenient and flexible option for unemployed borrowers, enabling them to benefit from a favourable APR and significant debt relief.
  • Wide range of borrowers – the flexible requirements put forth by alternative lenders allow for borrowers to be accepted despite not having traditional sources of income and lower credit scores.
  • Free interest loan quotes – without any damage to your credit, you can find out how much you can qualify for with many lenders based on your answers to questions about your financial situation and desired loan. 
  • Fast funding loans on employment insurance usually have quick approvals and fast payouts due to the automated underwriting process funded through direct deposit or e-transfer. 

The multitude of benefits given to you by an EI loan can ease your financial burdens. Ultimately, all you need is to find a good lender who is willing to work with you despite your unconventional income stream. 

person looking at a loan agreement


Getting a loan on EI is possible.

In fact, to some lenders, it doesn’t make much of a difference. After all, it’s income nonetheless. 

However, to ensure you’re on the right path, pay more attention to your credit report and financial standing. By doing so, you’ll know exactly what you need from your lender and can communicate your wishes effectively. 


Can I get a loan if I am currently unemployed?

Yes, you can get a loan if you’re currently unemployed, as long as you’re regularly receiving EI benefits. Ultimately, lenders want to see an income stream.

Can you get payday loan on benefits?

Yes, you can get payday loans on EI. In fact, these are one of the easiest loans to get on benefits, but you should be wary of the high interest rates and the short loan terms.

Does EI Affect credit in Canada?

The mere fact that you’re receiving EI benefits does not impact your credit score. What does is not paying your bills on time, having more debt and balances than you can handle, etc.

How can I get a loan while on EI without proof of income?

You can get a loan without proof of income if you consciously seek out lenders that don’t require pay stubs or employment letters. For these loans, you’ll need to provide personal identification, proof of income (if you receive any benefits for whatever reason), and bank statements.


When Angela combined her deep-seated love for linguistics with her growing interest for finance and money management, she struck a gold mine. She’s scoured the internet far and wide for all things related to money and finances, including payments, budgeting and investing. Now she’s eager to share her knowledge and skills with the world, determined to make it a better place. In her free time, she loves to read a good book.

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