Nothing could prepare Islanders or any residents of British Columbia, for the impact that COVID-19 has unleashed. During these increasingly difficult times, the financial impact of this pandemic on all Canadians has been staggering, and it doesn’t seem to be getting better any time soon. Ongoing layoffs and the shutdown of non-essential services has caused many to face financial uncertainty with reduced incomes yet limited change in essential expenses, including servicing debt.
These circumstances are becoming increasingly dire for many, and it’s not surprising the majority of Canadians are more concerned about their financial health than they are about their physical wellbeing.
Here are five ways Canadians can help manage debt during the COVID-19 pandemic:
Restructure your current budget into an emergency budget
While it might be too late to save for this current emergency, it’s not too late to create a new budget based on your current financial circumstances. This may include a reduced level of income, changes in monthly expenses, and not knowing the long term financial impact this pandemic will create.
Include all family members in a discussion about reducing costs and consider cancelling or putting on hold non-essential monthly fees like subscription services. While self-isolating, put other monthly expenses like parking passes and gym memberships on hold as well, as these can all add up. The money saved can be used for important essential items and other expenses.
Apply for the help you’re eligible for
Losing any amount of your income can be frightening. As the COVID-19 crisis continues to evolve, there are several resources available to eligible Canadians to help relieve some of the financial burden due to the loss of employment. 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.
It’s important to submit any applications promptly as processing times may be longer due to the sheer number of applications and the possibility of reduced staff.
Look to your bank for assistance
Many of Canada’s major banks have implemented changes and leniency 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 some of the things your lenders can consider. Contact your bank, financial advisor or credit union for further information to see if they are willing to work with you to help lessen your financial burden.
If you can, use deferred payments to create or deepen your emergency savings for the future as no one knows how long this pandemic will continue or its ongoing financial impact.
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 to ease the uncertainty
Things are difficult and there’s no shame in asking for help. If you’re experiencing looming debt issues as a result of COVID-19, or are finding your current debt-repayment plan has been derailed because of this pandemic, 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 on a consistent basis.
“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 in a multitude of ways. If you’re experiencing financial hardship and are finding it difficult to cope with debt during these unprecedented times, please utilize whatever tools and forms of relief are available to help you manage during these circumstances. Although you may feel overwhelmed and uncertain, the first step to addressing debt is to come up with a plan.
