No one is exempt from the financial impact and the overall difficulties that COVID-19 has created. With the amount of uncertainty surrounding this pandemic, one of the biggest concerns many Canadians face is how to support themselves and their families, and continue debt repayment among ongoing layoffs and the shutdown of non-essential services.
These circumstances are dire for many. It’s no wonder why the majority of those in Saskatchewan are more concerned about their financial health over their physical wellbeing.
Here are five ways Canadians can help manage debt during the COVID-19 pandemic.
Build an emergency budget
While it might be too late to save for this emergency, it’s never too late to alter your existing family budget to reflect your new financial reality. Consider what is a necessity during this time, and what you and your family can do without for the time being.
For example, if you can watch television shows or movies over the Internet, consider cancelling your cable for a couple of months. Resist the temptation to order in food or make unnecessary online purchases. Any non-essential spending activity that you can decrease for the time being can be helpful to support a reduced income.
Apply for the help you’re eligible for
Losing any amount of your income can be frightening, but it’s especially scary at this time since the COVID-19 crisis continues to evolve and there is no clear end in sight. 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.
Ask your current employer or do your research before submitting your applications for financial relief. Also, try to get your applications in promptly as processing times may be longer due to application numbers and the possibility of reduced staff.
Look to your bank for assistance
Many of Canada’s major banks have implemented changes to lending rules in response to COVID-19. These changes are designed for people experiencing loss of income and businesses experiencing profit loss.
Banks are offering several options including mortgage payment deferrals, skipping payments, loan extensions, revised terms or even reduced interest rates are all things your lenders can consider.
Contact your bank or credit union for further information and assistance. They will be able to give you accurate information and help you formalize a plan.
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 advice if you are uncertain
There’s no shame in asking for help. If you are experiencing looming debt issues as a result of COVID-19 or other circumstances, consider seeking the advice of a credit counselling service. Credit counsellors can offer tailored advice or enrol you (if you qualify) 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 www.loanscanada.ca for the latest information.”
The impacts of COVID-19 are widespread, affecting all Canadians. If you’re experiencing financial hardship and are coping with debt during these exceptional times, use what tools and forms of relief are available to manage the circumstances. Although you may feel overwhelmed, the first step to addressing debt is to come up with a plan.