Employment Insurance Loan

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Employment Insurance Loan

Unexpected events and emergencies can occur at any time, regardless of your job status or financial situation. Even if you're receiving Employment Insurance (EI), you might still find yourself needing a loan to cover an unexpected expense. While getting approved for a loan while on EI may seem difficult due to it not being a traditional income source, it is not impossible.

Fortunately, there are various loan options available that can be accessed even while receiving Employment Insurance.

Loan Options for Those on Employment Insurance

Employment Insurance (EI) supports Canadians after job loss, providing assistance even after severance benefits end. However, EI may not always be enough to cover daily expenses or unexpected costs, making additional financial help necessary. In such cases, loans can offer the support needed.

Get a free, no-obligation personal loan quote today, with rates starting as low as 9.99%!

You can apply without affecting your credit score.

Payday Loans for EI Recipients

Step 1. Step 1: Assess Your Financial Situation
Before applying for a loan, it's crucial to understand your financial standing from a lender's perspective. Lenders will consider your income, debt-to-income ratio, credit history, and other factors affecting your financial health. By reviewing your finances beforehand, you'll have a better idea of which lenders are likely to approve you. This approach helps you avoid applying with lenders whose requirements you may not meet, preventing unnecessary credit checks that could negatively impact your credit score.

Step 2. Compare Lenders and Request Loan Quotes

It's wise to gather loan quotes from several lenders before making a decision. Comparing different offers can help you save money on interest and fees. If you're unsure how to go about this or lack the time, you can use loan comparison platforms like Loans Canada, where you only need to fill out one application to receive multiple loan offers.

Step 3. Apply for an EI Loan – Once you've evaluated your options, choose the lender that best suits your needs. You may need to provide additional information to complete the application. After approval, the lender will transfer the funds to you.

BORROW YOU UP TO $50,000

An EI payday loan lets you borrow up to $1,500, with repayment typically due by your next payday, which can be within 1 to 4 weeks. Depending on your province, interest rates can reach up to $25 for every $100 borrowed.

To qualify for this type of loan, you’ll need to find a payday lender that accepts Employment Insurance (EI) as a valid income source. You can apply for an EI payday loan either online or in person, but you'll need to provide proof that you are receiving EI benefits.

How to Apply for Loans on Employment Insurance in Canada

Installment Loans for EI Recipients

A more budget-friendly alternative to payday loans is an installment loan. For those receiving Employment Insurance (EI), an installment loan can be a great choice, as it typically offers lower interest rates and longer repayment terms. These features make it easier to manage the loan and repay it over time. While installment loan providers often have more stringent requirements compared to payday lenders, they tend to be more flexible than traditional financial institutions such as banks.

To qualify for an EI installment loan, you'll need to find a lender that accepts EI as a valid source of income. However, it’s important to note that these lenders will also evaluate your overall financial situation, including your existing debt, to ensure that you can comfortably afford to repay the loan. This ensures responsible borrowing and reduces the risk of financial strain in the future.

Personal Line of Credit for EI

To qualify for a personal line of credit on EI, you'll need a lender that accepts EI as income. This option is beneficial because interest is only charged on the amount you borrow, and, similar to a credit card, you can reuse the funds as you repay.

Car Title Loan for EI

A car title loan is another option for those on EI. Because the loan is secured by your car, lenders are more likely to approve individuals with poor credit or non-traditional incomes. This provides the lender with security in case of default. However, it’s important to note that car title loans typically come with high interest rates and short repayment terms, which can make them challenging to repay.

Traditional banks or lenders may reject your loan application if you don't meet their criteria, such as having a good credit score, stable income, and steady employment. For this reason, it's better to consider specialized lenders who accept non-traditional income sources and work with borrowers of varied credit backgrounds.

3 STEPS TO APPLY TO AN EI LOAN

Cost Of A EI Personal Loan

Cost Of A EI Payday Loan

Depending on where you live and how much you borrow, the total amount you’ll need to pay back will vary. Below is a breakdown, of how much a EI payday loan will cost you in each province.

NOTE: Payday loans are costly and can result in a debt cycle if you can't repay the full amount.

Advantages of Applying for Loans on Employment Insurance with an Alternative Lender
  • Convenient – Alternative EI loan providers typically offer an easy, fully online application process.

  • Quick Funding – Many alternative lenders use automated underwriting, enabling fast approvals and rapid funding, usually via direct deposit or e-transfer.

  • Inclusive – These lenders often have more flexible requirements, making it possible for individuals with non-traditional income sources or lower credit scores to qualify for a loan.

  • Instant Free Loan Quote – Many lenders offer free instant loan quotes, allowing you to see how much you may qualify for with just a few questions. This typically won’t impact your credit score since no credit check is involved.
    Getting approved for a loan while receiving EI is achievable—simply find a lender willing to work with you. By researching your options, you'll soon find the loan and lender that best meet your needs.

BORROW YOU UP TO $50,000

NO OBLIGATION. IT IS FULL FREE 100%

Alternative Loans on Employment Insurance: Guarantor Loans

A guarantor loan can be an effective solution for financing your expenses if you're searching for a new job or struggling with bad credit that prevents approval from traditional lenders like banks or credit unions. To secure this loan, you need to find a reliable individual with good credit and stable finances to co-sign your application. This strengthens your credit profile and significantly increases your chances of approval.

Benefits of Guarantor EI Loans:
  • Bad credit is no longer a barrier, as the lender will assess your cosigner’s creditworthiness instead.

  • Even if your credit isn’t the issue, you remain primarily responsible for the loan, which means your credit can improve with timely, full payments.

  • You may qualify for a more favorable interest rate, making your loan more affordable in the long run.

Drawbacks of Guarantor EI Loans:
  • Like a traditional loan, failing to make timely payments can lead to penalties and extra interest charges.

  • If you default for an extended period, your guarantor will become responsible for the payments, potentially putting them in financial difficulty and resulting in serious consequences for both of you.

Frequently Asked Questions About Loans on Employment Insurance

What is Employment Insurance (EI)?

Employment Insurance (EI) is a program managed by the Government of Canada designed to assist workers who have lost their jobs through no fault of their own. Eligible individuals can receive benefits while actively searching for new employment. However, it's important to note that the program provides only 55% of your previous income.

Can I get a payday loan while on EI?

Yes, you can obtain a payday loan while receiving EI. Additionally, you may qualify for other types of loans, such as installment loans, personal lines of credit, or car title loans.

Can I get a loan if I’m on EI and have bad credit?

Yes, it's possible to get a loan even with bad credit while on EI. Payday loans are typically the easiest to qualify for, but they come with higher risks.

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How does Employment Insurance work?

While employed, your employer deducts Employment Insurance (EI) premiums from your paycheck, and also contributes 1.4 times the amount you pay. If you lose your job through no fault of your own, you can collect benefits from the Employment Insurance program for a certain period to help support you.

Is Employment Insurance Considered Income by Lenders?

Yes, some lenders in Canada do consider Employment Insurance (EI), the Canada Child Benefit (CCB), social assistance payments, and other government benefits as valid forms of income. However, because these sources of income are typically temporary, lenders may view them as less stable. As a result, they may offer loans with shorter terms and higher interest rates to compensate for the increased risk associated with these types of income.

How Much Money Can I Receive Through EI?

Typically, you can receive up to 55% of your average earnings through Employment Insurance (EI), with benefits lasting between 14 and 45 weeks. However, the weekly benefit amount is capped at $524. The exact amount you receive depends on factors such as your previous earnings and the unemployment rate in your region, meaning it can vary from person to person.

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