During these increasingly difficult times, the financial impact of COVID-19 on Canadians has been staggering and it may become worse before it gets better. Ongoing layoffs and the shutdown of non-essential services has caused many in Richmond to have reduced incomes or to lose income, with limited change in essential expenses, including servicing debt.
The uncertainty of these circumstances can become dire for many, so it’s no surprise the majority of Canadians are more concerned about their financial health over their physical wellbeing during this pandemic.
Here are five ways Canadians can help manage debt during the COVID-19 pandemic.
Apply for the help you’re eligible for
As the COVID-19 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.
To know what financial assistance you are eligible for, you will have to do some research first, then submit any applications promptly as processing times may be longer due to application numbers, the possibility of reduced staff and hours of operations.
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.
Mortgage payment deferrals, skipping payments, loan extensions, revised terms or even reduced interest rates are all things your lenders can consider.
If you can, use deferred payments to create or deepen your emergency savings for the future.
Contact your bank or credit union for further information and assistance as they will be your best source of information that will be helpful to your particular financial situation.
Alter your existing budget and create a new emergency budget
While getting financial help through your bank or personal lending company is advised, we also have to do our part during this unprecedented time. This means, cutting down on spending and adhering to a new budget in accordance with your individual circumstances.
While it’s too late to save for this emergency, creating a new budget based on a reduced level of income and any changes in monthly expenses is entirely possible. Include all family members in the discussion about reducing costs and consider cancelling or putting on hold non-essential monthly fees like subscription services - these can add up.
While self-isolating, ask to put other monthly expenses like parking passes and gym memberships on hold so you can allot this money for essential items and expenses.
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.
Many of us are facing financial uncertainty and 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 and if you qualify, enrol you into 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 at the prognosis of your financial health and debt repayment, the first step to addressing debt is to come up with a plan.