The financial impact of the Coronavirus on Canadians to date has been staggering and it doesn’t seem to be getting better. Layoffs and the temporary shutdown of non-essential businesses have resulted in reduced income for many with little change in essential expenses, including servicing debt.
For some people in Collingwood, these circumstances are dire. It’s no wonder why the majority of Canadians are more concerned about their financial health over their physical wellbeing.
Consider these 5 ways of managing debt during the COVID-19 crisis.
Apply for the help
Income loss can be frightening. As the Coronavirus crisis continues to evolve, there are several resources available to eligible Canadians to help relieve some financial burden. Financial assistance can come from traditional Employment Insurance, municipal and provincial rental assistance programs for tenants, the Emergency Care Benefit program, or extended benefits at work, if available.
Research and submit any applications promptly as processing times may be longer due to high application numbers.
Build an emergency budget
While it might be too late to save for this emergency, it’s not too late to create a new budget based on a change of income and monthly expenses. Include family members in discussions about reducing unnecessary costs and consider cancelling or putting on hold non-essential monthly fees like subscription services as they can add up.
While self-isolating, ask to put other monthly expenses like parking passes and gym memberships on hold.
Your bank may help
Many of the country’s major banks have implemented changes and exemptions to lending rules in response to COVID-19. These changes are designed for people experiencing loss of income and businesses experiencing profit loss.
Mortgage payment deferrals, skipping payments, loan extensions, revised terms or even reduced interest rates are all things your bank or credit union can consider.
If you can, use deferred payments to create or deepen your emergency savings for the future.
Consider a personal loan in an emergency
Personal loans don’t require any security and can be used for any purpose, making them an ideal financial resource in the face of an emergency. A personal loan is a flexible form of financing that allows you to access a lump sum with a fixed repayment schedule. This type of loan can be obtained quickly, especially through a licensed online lender.
Seek out advice
There’s no shame in asking for help. If you’re experiencing financial issues as a result of the Coronavirus or other circumstances, seek the advice from a credit counselling service. Credit counsellors can offer personalized advice or enrol you in a Debt Management Program (DMP) to consolidate unsecured debts into one, affordable, monthly payment. Creditors are more likely to accept a DMP in a financial crisis because some payment will be collected.
“Times are really tough right now, and what we are seeing with the COVID-19 pandemic is completely unprecedented”, explains Loans Canada Chief Technology Officer, Cris Ravazzano.
“We are seeing a lot of volatility in the lending space, with some lenders slowing or even temporarily stopping their operations. On the other hand, many lending institutions are designated as essential services and are choosing to keep their doors open. As Canada's first and largest loan comparison website, our close relationship with these institutions enables us to continue to provide Canadians with the emergency financial solutions they need. We have also made it a priority to maintain up-to-date information on COVID-19's effect on the credit industry and invite Canadians to visit LoansCanada.ca for the latest information.”
The impacts of COVID-19 are widespread. If you’re experiencing financial hardship and are coping with debt during through this pandemic, use what tools are available to manage the circumstances. Although you may feel overwhelmed, the first step to addressing debt is to come up with a plan.