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Avoid getting buried in debt during COVID-19

By: Ellie Burgueño

These times of hardship due to Coronavirus are serious times of crisis that not only put people under a health risk but also under the financial risk of getting buried in debt.

It is important that people suffering financially due to the Covid-19 pandemic avoid applying for loans unless they truly need them, and avoid loans with high-interest rates as well as loan sharks who will cause anyone profound misery and stress after the contingency.

As millions of Americans lose jobs, shifts, and other sources of income during the coronavirus health crisis, financial experts worry that people will be preyed upon by loan sharks who stand to profit.

This incredibly stressful period of uncertainty and health-based emergency, it’s also a financial-based emergency too. The more you can do now to plan ahead will save you time and energy – and importantly, money– when you might not be feeling at your best. You need to find ways to best manage your money.

While your health and welfare are top priorities, you may also be concerned about how your current economic condition might affect your financial situation right now and in the near future. It’s important you don’t allow yourself to fall under stress and lose control. Keeping your mind clear and cold is a priority to keep your life under balance.

Make a plan.

One of the things you need to do is a plan, in which you will create a budget with the money you do have and your current income, whether it stayed the same or it was reduced due to the pandemic.

If you’re worried about cash flow, you may need to cut back on as much as possible to get you through the next few weeks. It’s not going to be fun, but you’ll be pleased you did once it’s all over.

Monitor your credit.

Make payment arrangements with your creditors if you can’t currently make payments due to a reduction in your income. It’s a good time to be proactive in monitoring your credit, staying on top of your personal finances, and using resources that may be available to you, such as credit advice and information from your bank or your credit card companies.

Pay your bills on time.

Pay all your bills on time if possible. While that might be very difficult to do now, try to make at least your minimum debt payments by their due date every month to avoid hurting your credit score. Do your best to make your payments on time, even if you’re only meeting your creditors’ minimum requirements.

Use your savings.

If you have saving to rely on in your bank, use them. Don’t assume you can’t get your money if it’s in a fixed-term or notice savings account. Some banks are now saying you’ll be able to access them with no penalties. Check with your bank if they’re able to help.

Check the best loan options.

Check all the options and apply only for the best ones. Emergency government loans are definitely the best route but analyze thoroughly before falling with a loan shark. Credit Unions also offer very attractive and convenient loans which I encourage you to apply for only if you need it.

Certainly, this is a time of crisis never experienced before and we need to be prepared. I hope you can stay physically healthy but also financially.

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