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For a single mother in Canada who is surviving on a low-paying job without the support of a spouse, providing for the basic need of the children can be a serious challenge.
You constantly have to take care of necessities such as childcare, transportation, rent and other household expenses with the little that you make as a single parent.
This is sometimes exacerbated by emergency expenses such as a medical cost that needs to be settled right away.
Thankfully, there are numerous proven strategies for single mothers in Canada seeking emergency funding.
Emergency Funding for Single Mothers in Canada
As a single mother who needs help, it is advisable that you find out about the different funding programs that can help you out of your financial problems.
In Canada, there are emergency funding such as loans, benefits, and grants which you can apply for and use to cater for your expenses.
There are two types of benefits which single mothers in Canada can apply for. They include Federal and provincial.
To qualify for any of these benefits, you must be either a separated or divorced parent of a child or children (who lives with you) for whom you are solely responsible.
Federal Grants & Benefits
As a single mother in Canada, you can apply for several benefits from the federal government. Here are some of them:
Employment Insurance Benefits
You can apply for this particular benefit if you lost your job through circumstances that wasn’t your fault and also be actively searching for a job. Due to the one week waiting period that applies, you might want to quickly apply for Employment Insurance Benefits as soon as you are out of a job. This greatly benefits single mothers as they may be qualified for an additional Family Supplement to your EI, which can increase their benefit amount significantly.
Below is a highlight of some of the eligibility requirements for Employment Insurance Benefits. You may qualify for EI Benefits if you:
- Lost your job and it wasn’t your fault.
- Are actively searching for a job.
- Have the capability to work.
- Previously had an insurable job.
- Haven’t had a job not to talk of receiving a pay for a minimum of 7 consecutive days in the previous 52 weeks.
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Canada Recovery Caregiving Benefit (CRCB)
If you have a job or a business of your own but can’t work as a result of taking care of a child below 12 years, you can apply for Canada Recovery Caregiving Benefit (CRCB) which is administered by the Canada Revenue Agency. If you get approved for this benefit, you can get up to $500 weekly.
Tax Credit for People with Disabilities (DTC)
Even if you can’t increase the amount that comes into your purse every month or year, finding ways to reduce the amount that goes out can also benefit you greatly. That is the benefit of Tax Credit for People with Disabilities (DTC). If you have one mental or physical problem or the other, you can apply for DTC and get up to $8,000 in tax credits. This will help you with your financial burdens as it significantly reduces the amount that you will have to spend of tax. As a single parent, not only can you benefit from this, your child may even qualify for the Child Disability Benefit as well.
Canadian Child Benefit (CCB)
As a single mother, if your child or children is/are under the age of 18, you can apply for the Canadian Child Benefit (CCB). It is a tax-free that is granted based on your income, your marital status, and the age of your child/children. You can get up to $6,833 yearly for each child under the age of 6 and $5,765 for each child above the age of 6 but below the 18.
Canada Education Savings Grant
With this particular benefit, how it works is that you enroll your child in a Registered Education Savings Plan (RESP) and the government supports their future education by matching 20 cents for every dollar you save. This can be as much as $500 on a $2,500 yearly contribution. This should help you ease your financial burdens as a single parent.
Canada Dental Benefit
As a single mother with a child or children under the age of 12, if you are not able to afford private dental insurance for them, you can apply to get up to $650 from the government to cater for the dental costs of your child/children. However, the catch here is that you must fall in the category of people earning below $90,000 yearly.
Pension Plan Splitting in Canada
While you’re going through the process of your separation or divorce, you can apply to divide the Canadian Pension Plan (CPP) savings that you and your spouse amassed while living together as a married couple. Following the end of your marriage, you are expected to apply within 36 months.
Provincial Grants and Benefits
There are also certain benefits that each province offers to single mothers who meet the established requirements.
This is an assistance provided by individual province to help single moms pay for legal bills that has to do with divorce, child custody, and other legal services. It is advisable that you submit an application for this program as soon as your divorce becomes final.
As a single mother, once there is food for you and your children to eat, a big part of your financial burdens has been resolved. Individual province in Canada offer a vast range of food aid programs for which you can apply.
Young Women’s Christian Association of Canada (YWCA)
This non-profit organization was set up to assist single mothers with information, different services, and support in any way they can.
The amount granted through this program differs based on the province where you are applying. As there is a waiting list, it is advisable that you apply for it as soon as you can, so you don’t end up waiting for a very long time.
Rental Assistance and Housing
Many provinces offers subsidized housing benefit to single mothers, and even though the waiting time might be exhausting, the low cost of such houses is absolutely worth it. Based on your earnings, you may qualify for financial assistance to help you subsidize the price of houses that normally you wouldn’t be able to afford.
Loans for single parents in Canada
As a single mother in Canada, you might be skeptical about the possibility of convincing a lender to give you a loan, probably because you survive on benefits from the government or because you haven’t been able to build an impressive credit history.
However, there are certain types of loans that you can still obtain but you might have to pay a high interest rate on them. As expensive as such loans can be, they can still serve as a way out of your financial troubles. Below are some of such types of loans:
1. Personal Loan: This is a sum of liquid money that is dropped directly into your bank account which you are expected to pay back in installments. As a single parent, you can apply for this loan and get it quite easily. They can be used to cater for different kinds of expenses.
2. Payday Loans: This is a type of short-term personal loan that can be quickly gotten to solve one’s financial needs. It doesn’t require a collateral and the verification process isn’t as tedious as most loans. It should only be considered as a last resort, due to high rates that they usually come with.
3. No Credit Check Loan: As the name implies, this type of loan doesn’t require a credit check, rather, the decision of the lender to approve your loan depends on factors such as your income and outstanding debts.
4. CCB Loans: As a single mother, who benefits from Canada Child Benefit, lenders can give you a cash advance using your CCB as an alternative form of payment.
5. Bad Credit Loans – As the name implies, this type of loan are easily accessible to individuals with bad credit. As a single parent, if you are not able to get a loan from a bank due to poor credit, you can always apply to bad credit lenders and get the amount you need.
Minimum Loan Requirements For Single Moms
Although loan requirements are usually specific to each lender, it is safe to say that there are certain ones that are generally applicable. Some of them include:.
1. Credit Score: For most lenders to approve a loan, especially at a favorable interest rate, the borrower is usually required to have a credit score of 650 to 900. It is generally understood that having a good credit score means you are often diligent with debt repayments. As a single mom looking to get a favorable loan, you might want to find out what your credit score is. On a different note, there are lenders who approve loans without doing a credit check.
Income Level: Another factor that is considered by lenders before approving a loan is the size of the borrower’s earnings. The higher your income, the better the interest rate and the loan term.
2. Debt Level: It is not totally unreasonable for lenders to refuse to approve a loan or even if they do, grant it with a high interest rate if the borrower has enormous outstanding debts. Therefore, as a single mom looking to get a loan, it is wise to deal with the debts that you may have on ground before applying for a loan.
3. Job Status: Also, if you don’t have a job where you earn an amount that us is sufficient enough to settle your debts, most lenders might refuse to grant you a loan.
How To Improve Your Chances Of Getting A Loan As A Single Mom?
As a single mom with a low-paying job or an absolute dependence on benefits, getting a favorable loan could prove to be herculean task. This is because most lenders might see you as someone who won’t be able to repay their debts.
However, there are some steps that you can take to improve your chances of getting a loan with a favorable interest rate and a satisfying repayment term. Here are some of them:
4. Improve your credit: As a single mom looking to get a favorable loan for one purpose or the other, one of the things that you can do to better your chances is to work on improving your credit score. Lenders consider people with a great credit score as financially responsible borrowers who will repay their debts with the appropriate gusto. The fastest way to achieve this goal is to work on settling any debt that you may have on your credit history.
5. Go for a secured loan: While it might be a bit hard for you as single mom to get loans from most lenders because you are considered a risk, you can always improve your chances by offering a collateral. If you can offer your vehicle or your home as a collateral for a secured loan, lenders are more likely to grant you a loan. You should however have it at the back of your mind that if you’re not diligent with your payments, you risk losing your property to the lender.
6. Research lenders and compare offers: There are numerous lenders in Canada, each with their individual requirements, interest rates, and loan terms. Ensure to conduct a proper research on each one of them and compare offers so you can get the best deal.
7. Look for a cosigner: If all else fails, you can always look for a cosigner with an excellent credit score who will cosign your loan become responsible for your loan just as much as you are. Although you are responsible for making monthly payments, your cosigner will be held liable if you fail to repay your debt.
The various federal and provincial benefits that have been discussed so far were mainly created to provide financial relief to single parents who are struggling to take care of themselves and their children.