During these increasingly difficult times, the financial impact of COVID-19 on Canadians to date has been staggering. Ongoing layoffs and the shutdown of non-essential services has caused many in Kamloops to suffer from reduced incomes with limited change in essential expenses, including servicing debt.
This financial circumstance is dire for many. It’s no wonder why the majority of Canadians are more concerned about their financial health over their physical wellbeing.
Here are five ways Canadians can manage debt during the COVID-19 pandemic.
Apply for the help you’re eligible for
Losing any amount of your income can be a frightening scenario. As the COVID-19 crisis continues to evolve, there are several resources that have been made available to eligible Canadians to help relieve some of the financial burdens. 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.
Your individual situation determines what you are eligible for, so do some research before applying. Submit any applications promptly as processing times may be longer due to the high volume of applicants 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 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.
Contact your bank or credit union for further information and assistance and to see how they may be willing to work with you.
If you can, use any deferred payments to create or deepen your emergency savings for the future.
Build an emergency budget
While no one was prepared for the financial fallouts of this pandemic, it’s never too late to create an emergency budget based on a reduced level of income and any changes in monthly expenses. Include family members in a discussion about how each person can do their part in reducing costs. Consider cancelling or putting on hold non-essential monthly fees like subscription services as these can add up.
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 situation like this pandemic. 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.
Most Canadians are facing financial uncertainty. There’s no shame in asking for help. If you’re experiencing looming debt issues as a result of COVID-19 or other circumstances, consider seeking the advice and guidance 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, don’t hesitate to use what tools and forms of financial relief are available to manage your circumstances. Although you may feel overwhelmed, the first step to addressing debt is to come up with a comprehensive plan.