During these increasingly difficult times, the financial impact of COVID-19 on Canadians to date has been staggering and it doesn’t seem to be getting better. Ongoing layoffs and the shutdown of non-essential services has caused many in Manitoba to have reduced incomes with little change in essential expenses or their current outstanding debt.
These circumstances are becoming increasingly dire for many, and it’s not surprising why the majority of those in Manitoba and all across Canada 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.
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.
Contact your bank or credit union for further information and assistance to learn about what they are willing to help you with and how they are willing to alter or reduce your payments during this unprecedented time. Lending institutions are offering things like mortgage payment deferrals, skipping or reduced payments, loan extensions, revised terms or even reduced interest rates, so inquire as to how they are willing to work with you.
If you can, use deferred payments to create or deepen your emergency savings for the future.
Apply for the help you’re eligible for
Losing any amount of your income can be frightening, and the Canadian government recognizes this. As the COVID-19 crisis continues to evolve, there are several resources available to eligible Canadians to help relieve some of their 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.
It’s important to do your research and submit any applications promptly as processing times may take longer due to the sheer number of applications being submitted and the possibility of reduced staff and hours of operations.
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 reduced level of income and any changes in monthly expenses. Talk to your family and discuss how each of you can help reduce monthly costs by altering spending habits. Consider cancelling or putting on hold non-essential monthly fees like subscription services as these can add up.
While self-isolating, put other monthly expenses like parking passes and gym memberships on hold as they can’t be used during this time anyway.
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.
If you are like many other Canadians, you are uncertain about what your next financial steps should be. If so, there’s no shame in asking for help. If you are experiencing looming debt issues as a result of COVID-19 in addition to previously existing circumstances, consider seeking the advice of a credit counselling service. Credit counsellors can offer tailored advice or enrol you (if you qualify) into a Debt Management Program (DMP) to consolidate all of your debts into one, affordable, monthly payment. Creditors are more likely to accept a DMP in a financial crisis because it means that some consistent 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 and affecting all Canadians. If you’re experiencing financial hardship and uncertainty while also coping with debt during these unprecedented 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 that will help to put your mind at ease.