The Covid-19 pandemic came without a warning and left many without jobs or with severely reduced income rates. This is a serious issue in itself as a growing number of individuals have been left unable to keep up with their monthly expenses. However, the situation is even direr for those who also have an outstanding debt that they need to pay, especially when it comes from secured loans. Missing even one or two monthly repayments can cause serious damage to an individual’s credit rating rendering him unable to access a variety of banking services in the future. This having been said, repaying one’s debt, especially during the pandemic is not as strict as some may think.
· Try Setting a Strict Budget for Yourself
For some, the inability to manage their debt during the pandemic is a result of improper budgeting. While it is true that the income rates of many individuals throughout the country have been reduced by a considerable amount, spending money without having an expense plan is a sure way to go into debt. If you have one or more forms of debt that you cannot keep up with, the first step towards solving the issue should be to look at what you are currently spending money on. Creature comforts such as Netflix subscriptions and other similar services should be the first to go, followed by other unessential expenses. If you regularly shop at the same stores, look for discounts and coupons. Keep in mind that you should always pay your rent and utility bills first, then set aside an amount of money for groceries, and use everything that is left to repay your loans. If budgeting does not solve the issue, there are ways to find adequate help.
· Look for Governmental Help Programs
The government is currently offering a multitude of programs that are designed to help employers, as well as employees, get through this difficult period. Go online and look at what help programs you would qualify for and apply for them. Depending on the situation, your employer may also qualify for one or more financial help programs that are meant to make it easier for them to pay their employees.
· Ask the Lender If You Have Access to Any Useful Programs or Loan Schemes
It is also important to discuss the issue with the lenders. Most of them will have offers that are designed to help borrowers keep their debt under control. In most cases, you may be allowed to postpone the monthly repayments for a certain amount of time, however, some lenders offer debt refinancing solutions regardless of an individual’s credit rating.
· Consider Refinancing a Loan
Normally, all lenders offer borrowers the ability to refinance their loans, especially during financially difficult times. Be sure to ask the bank clerk if you can refinance your more expensive loan and do so immediately. This may be enough to reduce the cost of the debt enough to make it easier to keep under control.
· Apply for a Debt Consolidation Loan
If everything else fails, you can get a debt consolidation loan. This will allow you to reduce the cost of all the forms of debt that you might be currently repaying, as well as give you more time to return the money. However, it is important to keep in mind that these loans are secured. This means that borrowers must offer collateral (usually in the form of a real estate property such as a home) to apply for them, making them both very useful as well as somewhat dangerous.