The financial impacts of COVID-19 on Canadians have been staggering. Ongoing layoffs and the shutdown of non-essential services have caused many in Moose Jaw to have reduced incomes with limited change in essential expenses, including servicing debt.
These financial circumstances are becoming dire for many, resulting in the majority of Canadians being more concerned about their financial health than for their physical wellbeing.
Here are five ways Canadians can manage debt during the COVID-19 pandemic.
Create an emergency budget
While it’s always advised to have an emergency fund and budget for a rainy day, this pandemic’s quick onslaught has left many unprepared for the depths of its financial ramifications. That said, it’s not too late to create a new budget based on reduced levels of income and changes in monthly expenses. Sit down with your family and discuss ways you can all help to lessen costs and save money that can be put towards essential expenses.
Consider cancelling or putting on hold non-essential monthly fees like subscription services and reserve online shopping for essential items only. While self-isolating, ask to put other monthly expenses like parking passes and gym memberships on hold. All these extras can add up and save you money.
Apply for the financial help you’re eligible for
Losing any amount of income is frightening. Especially since no one knows for sure when Canadians will go back to work. 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.
There is a variance of information out there, so you’ll have to do your research to know exactly what forms of financial support you are eligible for. Once you know, submit any applications promptly as processing times may be longer due to the high volume of applications being submitted, and 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 to assist Canadians in response to COVID-19. These changes are designed to help soften the financial impact 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.
Contact your bank or credit union for further information and assistance.
If you can, use deferred payments to create or deepen your emergency savings for the future as no one knows the long-term financial impact this pandemic will create.
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 of money 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
If you need to, there’s no shame in asking for help. If you are experiencing looming debt issues as a result of COVID-19 or other circumstances, seek the advice of a credit counselling service. Credit counsellors can offer tailored and individualized advice or 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 it ensures at least 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 uncertainty or coping with debt during these exceptional times, use what tools and forms of relief are available to manage the circumstances for your own peace of mind. Although you may feel overwhelmed, the first step to addressing debt is to face it and come up with a plan.