What Do You Need to Become Eligible for Online Loans?


In the ever-evolving financial landscape of Canada, the popularity of online loans has surged, providing a streamlined avenue for individuals to secure funds for diverse needs. Recent statistics reveal the rapid growth of the online lending market, with projections indicating that it is set to reach impressive figures within the next few years.

As this digital borrowing trend continues to gain momentum, Canadians must grasp the essential eligibility criteria that underpin online loans. What are these requirements, you may ask?

In this guide, we’ll cover what you need when applying for online loans. Read on to learn all about it.

Credit Score and History

Your credit score plays a large part when applying for online loans. It enables lenders to get a snapshot view of your creditworthiness.

They will gain insights into your financial behaviour with factors such as:

  • Payment history
  • Credit utilization
  • Length of credit history
  • Types of credit
  • Recent credit inquiries

Credit scores can range anywhere from 300-850, with higher numbers indicating a healthier score. Many lenders will have a minimum score requirement to mitigate risk. Borrowers will see those with a higher score as more attractive since they’ll be more likely to make payments on time and fulfill their obligations.

With that said, some lenders will offer no credit check loans, so do your research.

You can see your score with credit scoring models such as FICO or Vantagescores.


Another important factor when applying for online loans is your income source(s). Lenders want assurance that you have a reliable source of funds to cover the loan payments. They will be able to gauge your ability to manage the additional debt and make timely payments.

There are many different types of income sources to become eligible, such as employment, self-employment, retirement or pension, and social security or disability benefits.

To verify your income you will need certain documents such as:

  • Pay stubs
  • Tax returns
  • Bank statements
  • W-2 or 1099 forms

Your income not only determines your eligibility but also influences the loan amount you qualify for. Some online lenders may inquire about your expected future income changes, especially if you’re applying for long-term online loans. This helps them assess whether your income will remain stable over the loan term.

Depending on the lender, you will need to meet a certain income minimum threshold. Many won’t disclose the minimum income requirement.

Debt-To-Income Ratio

To calculate your income, lenders will often use the debt-to-income ratio. This helps them see if you’ll be able to manage the additional debt payments alongside your existing financial obligations.

The DTI ratio is calculated by dividing your total monthly debt payments by your gross monthly income. A lower DTI ratio indicates better financial health and a higher likelihood of loan approval.


Collateral refers to an asset that you pledge as security for a loan. In the context of online loans, offering collateral can enhance your eligibility, especially if you have a lower credit score or if the loan amount is substantial. Collateral serves as a safety net for lenders; if you’re unable to repay the loan, they can claim the asset to recover their losses.

There are many different assets you can use as collateral for online loans, including:

  • Vehicles
  • Real estate
  • Valuables
  • Savings or investments

When you offer collateral, you’re applying for a secured loan. Secured loans generally come with lower interest rates and more favourable terms compared to unsecured loans, where no collateral is required. Unsecured loans rely solely on your creditworthiness and income, making them suitable for borrowers with strong financial profiles.

Using collateral has many advantages, such as higher loan amounts, lower interest rates, and improved eligibility. There are risks you should be aware of like asset loss, assessment of asset value, and a loan default.

Origination Fee

An origination fee is a charge that lenders levy to cover the administrative costs of processing and disbursing cash loans. It’s a one-time fee deducted from the loan amount before it’s provided to you. While not all online loans come with origination fees, it’s important to be aware of this potential cost when considering your borrowing options.

The purpose of origination fees includes administrative costs, risk mitigation, and profit generation. The origination fee structure is usually calculated as a percentage of the loan amount.

The exact percentage can vary, but it typically falls within the range of 1% to 5% of the borrowed sum. For instance, if you’re approved for a $10,000 loan with a 3% origination fee, you would receive $9,700 after the fee deduction.

Proof of Identity

When applying for online loans, proof of identity is a fundamental requirement. Lenders need to verify the identity of borrowers to prevent fraud, comply with regulations, and ensure that they are lending to legitimate individuals.

You can provide the following forms of ID:

  • Driver’s license
  • Passport
  • National ID card

Your identity verification provides a level of trust and security in the lending process.

Proof of Address

Your address will also play a pivotal role when applying for online loans. Lenders will need this to confirm your current residency, and contact information, and ensure the accuracy of your details.

It adds an extra layer of security to the lending process, preventing fraudulent activities and ensuring that the loan is being provided to a legitimate borrower.

You can provide the following forms to prove your address:

  • Utility bills
  • Bank statements
  • Lease or rental agreements
  • Government documents

The address on your proof of address documents should match the information you provided during the application process. Consistency in your details instills confidence in the lender and helps streamline the verification process.

Apply for Online Loans With King Cash

As Canadians navigate the world of online loans, it’s evident that this modern financial tool offers unprecedented convenience and accessibility. From unexpected expenses to planned investments, online loans have become a valuable resource for individuals seeking quick and efficient financial solutions. By understanding the eligibility requirements specific to the Canadian context, borrowers can approach the online lending process with confidence.

When you’re ready, apply for online loans with King Cash today.

Get a cash loan from the comfort of your home.

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