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Can You Take Out a Loan on a Tax Credit?

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Can You Take Out a Loan on a Tax Credit?

One question we’ve been asked many times in the past is, “Can I take a loan out based on the X tax credit?” Chances are, the answer is yes! To dive further in, let’s talk about why that’s the case and what to think about to ensure it’s the case in your situation.

What Makes up a Tax Credit?

When you talk about getting a tax credit, then you could be talking about a first-time homebuyers credit, electric car credit, or even a “baby bonus.” These are all purchases/events that can happen during a year - resulting in a tax break the following tax season.

While each will give a different amount, each amount is guaranteed at the end of the year - with proper documentation. Unlike a job with a salary, this won’t go away due to unforeseen issues. That leads to why a tax credit can be used for a small loan.

Tax Credits & Loans

Tax credits can be used as proof that a loan can be given because tax credits are guaranteed. When you qualify for a tax credit, it can’t be taken away, in the same manner, you can be fired or let go from a job. This is especially true for child tax credits.

If you have a child, that tax credit is guaranteed at the end of the tax year. That makes it the perfect proof that you will have the money to pay back a small loan. However, you should have a few things to prove your case when applying.
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How to Get a Child Tax Loan

Child tax loans are one of many types of loans offered at iCASH. However, unlike many of the other types of loans, this one looks at something a bit different to determine if you can get the loan.

How Much Have You Made?

iCASH has one simple requirement for income when providing loans to our customers. You must have a monthly net income of at least $800. This can include wages, tips, tax credits, federal benefits, social assistance programs, pensions, and more.

Are You a Canadian Adult?

In order to get a short term loan in Canada, you must be at least 19 years old and living in Alberta, British Columbia, Manitoba, Nova Scotia, New Brunswick, or Ontario. As proof of residency, you should be ready with a mobile phone number, email address, and home address.
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Do You Have Three Months of History?

If you’re going to apply for a loan with iCASH, then you’ll need to have three months receiving the same source of income as well as three months with the same bank. In addition, the income should be (at least in part) via direct deposit to an online banking system.

Ready for a Short Term Loan?

If you want to get a child tax loan (or any other type of payday loan,) iCASH is here to help. In most cases, we can offer a contract and money in your direction in less than an hour. All you need is an internet connection and a few pieces of information about yourself. Get started today!

Ramona Glanville

Ramona has been a regular contributor to some of Canada's top wealth-management editorials for over 30 years. She strongly believes in good saving habits, reducing financial clutter, and red wine.