Being a single mother does come with quite a bit of challenge. The journey is rewarding once you see your child thrive in future years, but the path is turbulent. From housing to education and maintenance expenses, a single mom has to face many hurdles. The good news is being a single mom in Canada, with a well-established welfare system, is a sigh of relief for many. Let’s look at the financial assistance and funds available for single mothers in Canada in the form of a loan and other assistance.
Challenges for Single moms when applying for the Loan
To be qualified for large loans, long repayment terms and low-interest rates, one should fulfill certain criteria. Many financial institutions provide lending services with better security; however, banks and credit unions have comparatively tough conditions. For the loan approval, a challenging situation emerges for a single mom. This is because of having a single household income, having no collateral or bad credit history, and missed payments.
Various Resources to Help Single moms apply for Loan
Single moms in Canada can apply with the federal government and benefit with:
Canada Child Benefit (CCB): It is a non-taxable payment that single parents can apply with children under 18 years of age.
As CCB is considered as income, so a single mom can use it to qualify for Loan. But it should be remembered here that not all financial institutions consider it a traditional source of income.
To take out CCB Cash Advance, also known as a payday loan, is also a practice that has been observed amongst financially deprived parents. A payday loan is a convenient way to borrow money that is of a small amount. However, it should be taken out only strictly as a last resort.
CCB Personal loans have the benefit of a low-interest rate coupled with a longer repayment time period. Hence, it is easier to pay off for a single mom.
For a single mom in Canada, Canada Child Benefit, along with a single mom’s income, can attain loan approval without much hassle. However, as a single parent, one has to prove that he/she can actually afford the cost of paying loans.
To take out CCB Cash Advance, also known as a payday loan, is also a practice that has been observed amongst financially deprived parents. A payday loan is a convenient way to borrow money that is of a small amount. However, it should be taken out only strictly as a last resort.
CCB Personal loans have the benefit of a low-interest rate coupled with a longer repayment time period. Hence, it is easier to pay off for a single mom.
Following are few concerns that we have settled for single moms:
*While you are taking a loan when using Canada Child Benefits, it will not affect your regular CCB amount.
*You can apply through multiple reliable lenders who are in Better Business Bureau database
*Please save your baby bonus payday loan for rainy days only.
HST/GST Tax Credit
Those single moms with low income can also avail themselves of tax-free quarterly payments. It takes care of most of the goods and services tax that has to be paid yearly otherwise. It’s simple. As you will file income tax, CRA will consider you for this tax credit.
Other Provincial/Territorial Benefits
It depends on your area and province. For example, in British Columbia, B.C. Early Childhood Tax Benefit offers a monthly tax-free payment for upbringing children under six years of age.
Other Options of Loans
Alternative lenders are a great way for single moms to apply for loans if they cannot get Loans from their preferred sources discussed. In addition, the approval times are speedier, and one can even borrow against CCB.
Having said that, these types of loans are riskier as they have a high-interest rate and fees, and the chances for fraud and identity theft are increased.
The types of loans you can avail of from alternative lenders are Personal Loan, no credit check loans, CCB loans and Bad credit loans.
Requirements for a Single Mom to qualify for a loan
Following are some of the primary financial and personal requirements to qualify for a loan:
* Credit Score of 650-900. It indicates that you have a sound record of timely payments.
*Job Status should preferably be full-time and steady with sufficient income to take care of payments.
*Income: Many lenders expect a monthly income of $1000 to $2000.
*Assets Status: If you are in the process of paying down your home and vehicle, your loan application might be denied.
*There should be no significant outstanding debts.
If you are a single mom in Canada, you can contact her here to look out for the best option for getting Loan. You can also check here to look out for other benefits.
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