Our biggest tip for keeping up with bills in the wake of the pandemic is to ask for help early rather than trying to shoulder your obligations alone. Meeting with a credit counselor is one great way to get insights into your budget and discuss your options with a trained professional.
Here are some other key resources to help you manage your bills during the pandemic.
Finding Housing Assistance During the Pandemic
For many of us, housing is the first and largest bill we prioritize each month. Many Americans are worried about keeping a roof over their heads through the pandemic, especially those who have been negatively affected by layoffs or business closures.
The Consumer Financial Protect Bureau (CFPB) offers a hub full of resources on mortgage and housing assistance during this unprecedented time. One suggestion is meeting with a HUD-approved housing counselor to go over your options in detail and hopefully come up with a workable plan to pay your mortgage or secure help.
One question many homeowners are interested in exploring is whether they qualify for a forbearance under the CARES Act. Similarly, renters need to know whether they qualify for protections based on the nature of the proper owner’s mortgage. The CFPB is a good starting point for accessible information on these subjects as well.
The sooner you assess the situation and come up with a plan, the less likely you are to find your living situation in jeopardy. Although it is a very stressful time for many, being proactive can help you reach out for help before you’re at risk of defaulting on your loan.
Explore Possible Debt Relief Strategies
Trying to manage existing debts while simultaneously having to take on new ones is doubly difficult — especially when it comes to high-interest credit card debt.
One way to lighten the load is to come up with a plan for securing debt relief. This is an umbrella term describing a host of strategies for reducing the amount you pay in interest/fees, reduce the actual principal amount you owe or both.
Here’s a brief overview of two strategies worth further exploring when debt is dragging you down.
The simplest way to think of consolidation is going from multiple monthly payments to one. How do debt consolidation companies work? It depends. Many of these companies offer loans to help borrowers pay off other, costlier debts in one go. For instance, a borrower with solid credit may find they’re able to qualify for a consolidation loan from a company at 10 percent APR — so even with fees, it’s more advantageous than paying off credit card debts over time at 20 percent. Plus the nature of installment payments for a given time period tends to be more manageable than indefinite credit card payments.
Many borrowers find themselves unable to qualify for a low-interest consolidation loan, especially if financial hardships have already led to missed payments — which in turn have lowered their credit scores. Settlement is a more drastic option in which you or representatives from a debt settlement program negotiate with creditors and try to get them to accept a reduced payment. It’s not guaranteed to work, but certain creditors are amenable to taking settlements from borrowers struggling to pay their bills.
Dealing with Student Loans During COVID-19
Student loans are one of the most common types of debt, and also some of the most difficult to stay on top of in tough financial straits.
According to the U.S. Department of Education, even though the original CARES Act relief measures ended September 30, some flexibilities still apply to certain federal loans through the end of the year and potentially beyond — like payment suspension and a temporary zero-percent interest rate.
Above all, ask for help and explore all available resources to make sure you’re getting all the assistance you can — and taking advantage of programs like mortgage and loan forbearance, as well as trying to get rid of debts.