Government Loans For New Immigrants



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The Canadian government loans for new immigrants caters for the welfare of newcomers to Canada through the Immigration Loans Program (ILP). The program funds refugees who may not have access to funding from other private sources. Immigrants can use the loans for the following:

  • Reimbursements for transportation costs to Canada.
  • Support and establishment costs.
  • Permanent Resident costs

Types of Immigrant Loans

There are three types of government loans for immigrants. They are:

  • Transportation loans.
  • Assistance loans.
  • PR fee loans.

Transportation Loans

Many immigrants arrive in Canada through the Refugee Resettlement Program. The government defrays the cost of their transportation alongside their medical exams and flight ticket.

The applicant bears the cost of the loan and the repayment period depends on how much money was given. The reason for the loan is that most immigrants cannot afford to arrive in Canada without financial help. All class of refugees is eligible for the transportation loan including:

  • Government Assisted Refugees.
  • Blended Visa Office Referred.
  • Privately Sponsored Refugees.
  • Visa Office Referred.

It’s important to note an immigrant will not be deported for failing to repay their transportation loan on time. Any immigrant who cannot repay their loan may give compelling reasons to the Canadian government. The government may grant their request by reducing or postponing the transportation loan payments. However, this request is not always granted.

Ineligible Expenses

Some of the expenses not covered by the transportation loan include:

  • Baggage beyond the free baggage allowance.
  • Cost of living personal items from the home country.
  • Cost of moving livestock and pets from the home country.
  • Medical cost to ensure the applicant is fit to fly.

Assistance Loans

Government loans for new immigrants to settle down and get employment in Canada are known as assistant loans. Some of the needs covered by the loan include:

Basic Needs

  •  Rent and utility payments
  • Food
  • Clothing
  • Miscellaneous
  • Household products

Labour Market Needs

  • Employment tools
  • Certification exams
  • Child support payments

Ineligible Applicants

The following individuals are not qualified to apply for an assistance loan:

  • Permanent residents living in Canada for three years or more, and who can work.
  • Persons who have assets that can serve as collateral for a loan with a traditional lender.

Despite the above, applicants who have savings are allowed to apply for an assistance loan. The ability to save money is seen as proof the applicant will be able to pay off the loan if granted.

PR Fee Loans

Also known as “the right of permanent residence fee”, PR fee loans are provided to foreign citizens to defray the cost of applying for permanent residency for themselves and their dependents. The loan also covers Canadians who are applying for a beneficiary. Some of the document required to process a PR fee loan include:

  • IMM Form 0500
  • IMM Form 0502

If your loan is processed outside Canada, it’s possible for the loan to be processed together with the transportation loan. Although there isn’t any timeline for approval, the administrative period for the loan is set at 180 days.

Government Loans For Immigrants: Eligibility

Personal loans for new immigrants to Canada aren’t for everyone. If you’re an immigrant who needs to access these loans, you must meet certain requirements. The Immigration and Refugee Protection Act states that a foreigner applying for the Canada PR may apply for an immigration loan. Additionally, permanent residents, as well as Canadians, can also put in a loan application on behalf of an immigrant beneficiary.

Some of these beneficiaries include:

  • Significant Others
  • Dependent children
  • other persons who depend on the loan applicant

Immigrants in the federal worker class rarely apply for loans because they have a duty to have their own funds. In the event that an immigrant in the federal worker class applies, they must meet be:

  • Refugees who happen to be skilled workers on a pilot basis.
  • Applicants in the family class who have nowhere else to loan money from.

Loan Evaluation

The Canadian government may allow individuals to access government loans for immigrants using the following criteria:

  • To make sure refugees have the funds to travel to Canada, which meets the humanitarian objectives of the Refugee Resettlement Program.
  •   If there’s a likelihood the applicant won’t be able to repay, the funds are sourced through a contribution.

Other factors to consider include:

  • The applicant is 18 or older.
  • Has skills that can secure employment in less than 5 years.
  • Has a manageable debt load – for applicants applying on behalf of a beneficiary.
  • The individual is in dire need of government support to become self-sufficient.

Responsible Authorities

Government loans for new immigrants can only be disbursed by the designated authorities. To ensure strict compliance, the authorizing officer must ensure:

  • The loan is approved in accordance with s.34 of the Financial Administration Act.
  • All other relevant and extant laws and directives are followed.
  • The applicant has attained the age of majority (18yrs).

Loan Counselling

Government loans for new immigrants are not handed out on a platter of gold. The Canadian government deems it necessary for applicants to understand they are responsible to meet the loan terms, as well as conditions for repayment. Loan counseling is provided to ensure the applicant understands the nature of the loan while meeting eligibility requirements.

Immigration loans and Payment

Once an applicant submits the immigration loan application form, and the application is approved, they’ll have to make monthly payments to offset the loan. The following are the payment duration for immigration loans:

  • Loans not more than C$1200 must. Be repaid within 3 years.
  • Loans more than C$1200 but less than C$2400 must be paid within 4 years.
  • Loans more than C$2400 but less than C$3600 must be paid within 5 years.
  • Loans more than C$3600 but less than C$4800 must be paid within 6 years.
  • Loans that exceed C$4800 must be paid within 8 years.

Final thoughts

Government loans are not readily given to any immigrant who applies. Ensure you’re eligible for the loan before putting in your application

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Chima E.


Avid researcher, freelance writer, and personal finance enthusiast passionate about financial education and literacy.

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Kareena Maya

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Kareena Maya is a freelance writer focused on the personal finance and travel spaces. He frequently writes about credit cards, banking, student loans, insurance, travel rewards and more. His work has been featured in publications such as Forbes Advisor, Bankrate, Credit Karma, Finance Buzz, The Ascent and Student Loan Planner.

Kareena Maya is a freelance writer focused on the personal finance and travel spaces. He frequently writes about credit cards, banking, student loans, insurance, travel rewards and more. His work has been featured in publications such as Forbes Advisor, Bankrate, Credit Karma, Finance Buzz, The Ascent and Student Loan Planner.