July 31, 2020
by Addison Davies
It is never suggested to pile up debt, but this time circumstances are different, and hence you can be told that you should not worry if you are accumulating debt. Since the outbreak of COVID19, a large number of people have lost their jobs and relying on unemployment benefits.
Although the government provided the opportunity to put off repayments during the lockdown, the move did not cause comfort as suggested because the interest continued to add up. Paying off the loan is still a big question.
While you do not have money coming in, your savings are shrinking like a river in the drought season. Millions of people are facing problems due to debt piling up. If you are in a tight spot, you can find yourself piling up debt. You do not need to beat yourself up because it is OK to mount up debt during the COVID19 pandemic outbreak.
Further, you can take comfort in the fact that you are not alone who is facing this situation. The COVID19 has disrupted the economy so that you will go through financial problems.
Answering the question if it is good or bad to accumulate debt is not that easy. Although it is a demand during the COVID19 pandemic, you can continue to0 pile it up recklessly. The best approach is that you should try to manage your bills. Here is what you should do:
Do your homework
As you have multiple debts, the first step is to make a list based on the priority. Of course, the mortgage is more important to settle than credit card bills. However, it does not mean that you will overlook credit card bill accumulation. It is crucial to know how much debt you have and how your lenders are ready to help you.
Make a repayment plan to start the settlement process. Some lenders may suggest you take out debt consolidation loans in Ireland, but again it depends on your financial circumstances. This option is not feasible for everyone, so look out for debts that you can settle as quickly as possible.
Talk to your lenders.
Once you know what kind of loans you have and how much you have to pay, you can talk to your lender. They can evaluate your financial condition and accordingly frame a repayment plan.
For instance, if you have a mix of a mortgage, bad credit loan, and credit card bills, they may frame a plan prioritizing mortgage repayments. Repaying a small amount of money is better than paying nothing and keeping piling up. Some lenders can also put on a different repayment plan and provide ease with interest on your outstanding debts. The relief varies from individual to individual because everyone has a different financial condition.
Some of the lenders are also offering COVID19 schemes their borrowers so they could make repayments easily. If you have a good relationship with your bank or lender, you can leverage them to get better repayment plans. If you have been borrowers repaying your debts on time until the outbreak of COVID19, you can get good deals because of your goodwill.
Consider financial counselling
This time you may need a financial counsellor. However, make sure that you choose a reputable financial counsellor. They can evaluate your financial condition and recommend various ways to settle all your outstanding debts.
Credit counselling can be a good option if you are adding to the current debt. A few lenders are offering loans to people during the COVID19 pandemic. It can be a bit hard to get a new loan when your current debts are unsettled, but with the help of financial counsellors, you can get some worthy repayment plans.
If you are piling up debts during the COVID19 pandemic, you are not alone, but you cannot bury your head in the sand. It would help if you tried to start the settlement of your debt, so you do not fall into a debt trap. If it is not possible to keep up with repayments, talk to your lenders. They will suggest you affordable repayment plans. If you continue to make little payment, you will be able to prevent yourself from falling into a debt trap.