Loans Canada Launches Free Credit Score Portal And Is Recognized As One Of Canada’s Top Growing Companies
Loans Canada is pleased to announce it placed No. 131 on the 2022 Report on Business ranking of Canada’s Top Growing Companies.
The rise of COVID-19 has set off quarantines and layoffs causing some individuals to have reduced income. The reduction in income is concerning for everyone, but especially alarming for those with credit card debt. If you’re unsure of how to manage your credit card debt during the COVID-19 crisis, this is what we know so far.
In response to the COVID-19 economic downturn, many financial institutions, service providers and businesses have been implementing special solutions to mitigate the overall hardship.
Since your bank is responsible for what happens with your credit card and other financial products at this time, visit their website for guidance with regards to COVID-19. Many financial institutions are overwhelmed with calls at the moment. It’s suggested that you visit your bank’s website first to have your questions answered, then call if you need more information.
Many of Canada’s major banks have made a public statement regarding changes they have implemented as a response to COVID-19. These changes are special solutions that are designed to help individuals experiencing loss of income and businesses dealing with reduced profits. Many banks are also handling issues on a case by case basis, contact them if you require further assistance.
The Government of Canada has announced that they will be placing a six-month, interest-free pause on the repayment of Canadian student loans for all student borrowers. This pause in repayment is known as a moratorium. The student loan moratorium comes into effect on March 30, 2020. No payment will be required and interest will not accrue during this time. Students don’t need to apply for the repayment moratorium. The Canada Revenue Agency (CRA) is also deferring filing and payment due dates for individual 2019 tax returns.
Whenever mass economic struggle strikes, it’s best if you can save as much money as possible for financial emergencies. Since financial institutions and the government are allowing you to defer payments, put what you don’t spend on necessary living expenses into savings.
The purpose of the government and financial institutions allowing you to defer payments is to avoid further economic turmoil for both businesses and individuals. Use this opportunity to save for a financial emergency as no one knows what the future holds at this time. It should go without saying, this isn’t the time to spend on luxury items.
There’s an old saying that goes: prepare for the worst and hope for the best. During this economic downturn resulting from COVID-19, it’s advised that you get ready for financial struggle as best you can so you’re prepared for the worst. Even if the worst doesn’t happen, you’ll feel more relaxed with a plan in this time of uncertainty. And of course – hope that you don’t run into any problems and make it through this crisis.
Below are alternative financing options you can turn to if you need them during the COVID-19 pandemic.
A home equity line of credit (HELOC) is a line of credit that uses your home equity as security. HELOC financing is also commonly referred to as a second mortgage. In order to obtain this type of financing, you must own a home that has positive equity.
You can calculate the amount of equity in your home by taking the market value and subtracting your mortgage and other outstanding debts against the home. For example, if the market value of your home is $500,000 and your mortgage is $350,000, your equity would be $150,000 ($500,000 – $350,000).
A HELOC works like any other line of credit. You can draw down from it when you need and interest becomes payable when there is an outstanding balance. HELOCs are good in financial emergencies because they can be used to cover unexpected expenses worth thousands of dollars. A line of credit typically only requires interest payments as well, meaning principal repayment is flexible.
A Debt Management Program (DMP) is a service offered by credit counsellors that consolidates unsecured debts into one larger monthly payment. The main goal is to make your debt obligations more manageable and more affordable. The payment is made to your credit counsellor who then distributes the funds to your creditors on your behalf. You will be required to repay the entire debt within five years.
If you’re interested in a DMP, you’ll need to meet with a credit counsellor who will determine if you qualify for the program, whether your creditors will accept the terms of the program and how much you can afford to pay each month. If you meet all the criteria, the credit counsellor will contact your lenders to negotiate a settlement, then you’ll start making payments. At the end of the process, all your unsecured debt will be paid.
A debt management program is ideal in a financial emergency if you have a lot of unsecured debt, including credit card debt, and are behind on payments. Creditors are more likely to accept a DMP in a financial crisis, such as COVID-19 because some payment is better than no payment. You will also have an overall reduced amount of debt and only need to worry about one payment.
A personal loan is a flexible form of financing that can be used for virtually any purpose. Personal loans are typically unsecured meaning they do not require the use of collateral. When you get approved for a personal loan, you’ll receive a lump-sum payment and then become responsible for regular, scheduled payments which include interest and principal components.
Personal loans are ideal in financial emergencies because they don’t require security and can be used for any purpose. In addition, they can be obtained quickly, especially when you’re using an online lender.
In times of financial struggle, the key is to avoid missing payments. Even if you can’t make the payment in full, be sure to make the minimum payment (plus a little extra if you can) to avoid adverse effects on your credit. If you fail to make the minimum payment, you might incur late fees and increased interest rates.
The impacts of COVID-19 on your finances can feel overwhelming, especially if you have outstanding credit card debt. Do your best to prepare by making a budget, paying minimum balances and saving what you don’t spend on living expenses. Finally, take advantage of financial institution and government relief as it is there to help you through this difficult time.
Rating of 4/5 based on 6 votes.
Save time and money with Loans Canada. Research and compare lenders before you apply. Share your experiences with Canada's top lenders.
Loans Canada is pleased to announce it placed No. 131 on the 2022 Report on Business ranking of Canada’s Top Growing Companies.
Frank Mortgage is Canada’s one-stop shop for mortgages. Get up to $1,500 cash back on your mortgage.
Great unsecured credit card for customers currently in, or recently discharged from, a consumer proposal or bankruptcy
Earn an average 5%¹ cashback at thousands of partners and at least 0.5%² cashback guaranteed with Neo.
KOHO’s Credit Building Program helps you build a better credit history with easy to manage payments for just $10/month.
All consultations and conversations with Loans Canada and its partners are confidential and risk-free. Speak with a trusted specialist today and see how we can help you achieve your financial goals faster. Loans Canada and its partners will never ask you for an upfront fee, deposit or insurance payments on a loan. Loans Canada is not a mortgage broker and does not arrange mortgage loans or any other type of financial service.
When you apply for a Loans Canada service, our website simply refers your request to qualified third party providers who can assist you with your search. Loans Canada may receive compensation from the offers shown on its website.
Only provide your information to trusted sources and be aware of online phishing scams and the risks associated with them, including identity theft and financial loss. Nothing on this website constitutes professional and/or financial advice.