How to Take Control of Your Debt During the Coronavirus Pandemic?

You might be in a difficult spot right now and find that you are accumulating debt. But don’t be too hard on yourself. If you have limited options, it is okay to carry the debt for a bit.

The post How to Take Control of Your Debt During the Coronavirus Pandemic? appeared first on Enterprise Podcast Network - EPN.

Having debt is never ideal, but today, it might be necessary. The coronavirus pandemic has severely upset the economy. As businesses have been forced to close, employees have been furloughed or completely laid off. Millions of people have placed claims for unemployment benefits. 

You might be in a difficult spot right now and find that you are accumulating debt. But don’t be too hard on yourself. If you have limited options, it is okay to carry the debt for a bit. You can avoid bankruptcy if you take the time to control your debt. By managing your bills, your financial situation can get better after the pandemic. You are not alone, whether you have a mortgage, credit card debt, or student loans.

Create a List

First, take stock of everything you owe right now. Order it from the most pressing to the least. If you have a mortgage, that might be near the top, so you can keep a roof over your head. Credit cards might be farther down, even if they have high interest rates. Once you have organized everything, you can come up with a plan for how to pay your debts down. Looking at what each lender might do for you is next.

Contact Your Lenders

Some creditors may have options that will allow you to cut back or delay your payments. The CARES Act requires that people who have mortgages backed by the government be able to delay their payments for as long as a year.

If you have credit card debt, you may also be able to get a break. Some credit card providers offer assistance programs for their customers. 

No matter what bank you use, you will likely be able to find some relief. Many people have had luck negotiating, so it won’t hurt for you to ask. Visiting your lender’s website may give you information on the bank’s COVID-19 guidelines. Calling may result in a long wait time, especially if you work with a larger bank. Even an online chat or an email can be a good option. Right now, having a connection with a person at your bank can be extremely helpful.

Do your research and look for unintended consequences. Just because you are allowed to miss payments doesn’t make it the best option. It could hurt you financially later, especially if you have to pay quite a bit of interest on your loans.

Look into Credit Counseling

You might want to work with a credit counselor. They can help you create a plan for consolidating your debt payments and lowering your interest rates. That is usually a good option for people who already have debt. If you have more debt because of COVID-19, you should advocate for yourself. 

But be cautious of working with a debt settlement company, particularly one that tells you to avoid paying monthly bills. These companies attempt to use that as a reason to not settle for as much money. Paying your bills late only hurts your credit score, so it might not work for you.

Try Balance Transfers

Financial advisors generally tell people to move debt from high-interest cards to ones that have 0 percent interest. However, lenders have become stricter with underwriting standards. That is especially true for credit cards because the debt is not secured. When people are struggling financially, that is often the first bill that is left unpaid. To get a good balance transfer card, you’ll most likely need to have a credit score higher than 700. It’s also important to have a steady income.

Closing Thoughts 

After the pandemic has passed and your financial situation begins to improve, take another look at your debt. Create a strict budget, so you can start to chip away at everything. Consolidating your credit might be an option. 

If banks ease their restrictions, you may be able to get a 0 percent rate on a balance transfer card. You can also look at different banks and credit unions to get a personal loan.

The post How to Take Control of Your Debt During the Coronavirus Pandemic? appeared first on Enterprise Podcast Network - EPN.