The financial impact of COVID-19 on Canadians to date has been staggering, causing increasingly difficult times for British Columbians and all Canadians alike. Layoffs and the shutdown of non-essential services are ongoing, causing many to suffer reduced incomes despite limited changes in essential expenses, including debt repayment.
These circumstances are fast-becoming dire for many, and it’s no wonder why the majority of Canadians are more concerned about their financial health over their physical wellbeing during this unprecedented time.
That said, here are five ways Canadians can help manage debt and financial hardship during the COVID-19 pandemic.
Create a revised emergency budget
While it might be too late to save money for this emergency, it’s never too late to create a new budget based on a reduced level of income and any changes in monthly expenses. 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.
Apply for the help you’re eligible for
Whether you have been laid off, or your business has been deemed a non-essential service, 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 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.
Depending on your individual situation determines what financial assistance or relief is available to you. Research what you are eligible for and then submit any applications as soon as possible as processing times may be longer due to the high volume of applications being submitted.
Look to your bank or financial lender for assistance
Many of Canada’s major banks have implemented changes to lending rules and debt repayment options 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, financial advisor or credit union for further information and assistance. Knowing what options are available will provide you will some much-needed peace of mind.
If you can, use deferred payments to create or deepen your emergency savings for the future. You never know the far-reaching financial implications of this pandemic or how long it will last.
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.
These are uncertain financial times for all Canadians, 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 or enrol you (if you qualify) in a Debt Management Program (DMP) to consolidate unsecured debts into one, affordable, monthly payment, which is more achievable for most people. Creditors are more likely to accept a DMP in a financial crisis because it guarantees that 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 and plunging them into financial uncertainty. If you’re experiencing financial hardship and are coping with debt during these exceptional times, don’t hesitate to use the tools and forms of relief made available to manage the circumstances. Although you may feel overwhelmed, the first step to addressing debt is to come up with a comprehensive debt-repayment plan.