19 Jul 2020

Sonia on Sunday: Immigration Loans Program

Relocation to a new country may be expensive; that is why the Canadian government launched Immigration Loans Program (ILP).

Sonia Krajewska is the ANC’s Community Settlement and Integration Counsellor (Permanent Residents).

The ILP can help eligible immigrants (mainly refugees) with resettlement to Canada. These loans are used to pay for some expenses which may include travel to Canada and may be used for other costs association with relocation. Loans are meant to assist with: 
      • covering the cost of transportation to Canada (transportation loan)
      • settling in Canada (assistance loan)
      • paying the cost of the right of permanent residence fee (RPRF loan)

Who is eligible for an immigration loan?
Applicants for loans may be foreign nationals applying for Permanent Residence under any category or a Convention refugee or person in need of protection. Canadian Citizens and Permanent Residents may also apply for a loan on behalf of a beneficiary.

What exactly is a transportation loan?
The most popular loan is a transportation loan. The goal of the transportation loan is to provide financial aid to applicants to cover the cost of relocation to Canada. It also includes service fees from the International Organization for Migration (IOM) as well as other related expenses. In most cases IOM books a flight for the applicant and provides them with a form called Terms and Condition of Loan (IMM 0502).

How much time do I have to pay the loan I received?
Clients who receive a loan must begin to repay back the loan after the 12th month from the issuance of the loan. Which means, your first year in Canada may be stress free in regard to the loan repayment. Depending on the amount borrowed loans must be repaid as follows:
     •  if loan was not exceeding $1,200 – you will have 36 months to repay it
     •  if loan was over $1,200 but not exceeding $2,400 – you will have 48 months to repay it
     •  if loan was over $2,400 but not exceeding $3,600 – you will have 60 months to repay it
     •  if loan was over $3,600 but not exceeding $4,800 – you will have 72 months to repay it
     •  if loan was over $4,800 – you will have 96 months to repay it

Is there any interest on the loan?
IRCC no longer charges any interest on the transportation loans.

I am ready to start paying my loan back – what do I do?
IRCC will send you a letter outlining the process for paying back your loan, and giving you contact information to use in case you have questions. There are multiple of ways you can pay your loan back including:
    • personal cheque
    • certified cheque
    • postal or money order
    • credit card
    • directly at participating financial institutions
    • internet banking through participating financial institutions

Payments must be made in Canadian funds. Cheques should be made payable to the “Receiver General for Canada”.

I am not ready to pay the loan yet. Can I defer the repayment?
It is important to always make regular payments for your loan. If you are struggling to make the payment you should contact IRCC as soon as possible. In special circumstances your loan repayment may be deferred by the collection officer, but that is not automatically guaranteed. If the loan recipient was a protected person then the loan payment may be deferred up to two years. In any other circumstances, the deferral of loan payment may be for up to 6 months.

What happens if I stop paying the loan?
While you will not be removed from Canada if you miss your loan payment, there can be serious consequences if you default. If you stop repaying your loan, IRCC can refer your case to a collection agency, keep your income tax refunds, or take you to court. It is always best to discuss your situation with IRCC to determine how to repay the loan. If you find yourself in a tough situation and have financial problems in addition to your loan you may want to think about seeking advice from a  financial advisor.

If you are looking for more information about Transportation Loan you can consult with IRCC’s Collection Services toll-free at 1-800-667-7301

Lastly, please note that IRCC has decided to suspend its immigrant loan collections activities until September 2020 due to COVID-19.


Do you have any questions or need assistance with settlement in Newfoundland & Labrador? Contact me at skrajewska@ancnl.ca

Read all Sonia’s blog posts here.