This is a travel blog but we care about our readers and often share similar experiences. I found some financial resources this week that can help those affected by coronavirus and wanted to share them.
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Banks, Creditors, Lenders Are Helping Customers Like You
The banking system relies on everyone paying their bills. If banks, creditors and lenders of any kind are not flexible with customers, they will not be able to keep their own businesses afloat. Some municipalities have suspended the right to evict or foreclose during the current crisis so even if they wanted to take back properties and kick out tenants, they couldn’t.
They need to allow grace periods or they won’t have a business when this is over.
That said, I think it’s also incredible how willing banks have been to grant this grace period without much hassle. There are programs to avoid service shut-offs, rate discounts, and short term payment abatements for rent and mortgages.
Communicate With Them All
While a creditor like Chase may provide options for skipping the next couple of mortgage payments (and tacking them on to the end), that’s not the same as just skipping them without speaking to them. You must communicate with creditors and lenders, and phone lines can be long.
It’s worth it.
If you have regular payments to a business, contact them and let them know what’s going on. If you’re out of work, furloughed, or have taken a pay rate decrease, let them know. Even if you’re not out of work, other hardships caused by this may affect your ability to earn and pay as you normally would. Get up early, call in or go online and ask what questions you have.
Utilize the Programs Available
There is an exhaustive list of all of the banks that are offering help published here. Rather than try to improve on that excellent post, I will give you an example of how simple it is.
MyFedLoan.org (student loan management firm) has already dropped all loans to 0% and placed all loans in temporary forbearance but you still need to remove your automatic payment for the period. If you’ve already paid after March 15th, you can request a refund of the amount in full. If you choose to continue to pay during the period, the entire amount goes to principle. If another lender holds your student loans, contact them for details.
I have two car payments and both lenders waived payments for three months (though we’d already paid one of them) without a fee (if you just ask.) This extended the payment term though as they are leased vehicles, the miles are not adjusted, luckily we aren’t driving much so this helps us get through this period.
If you’re unemployed or a business owner, consider reviewing the CARES act ($2 trillion stimulus/rescue/bailout/unfathomable debt bill just passed.)
Due to interest rates being dramatically lowered, it’s a nice time to refinance any debt that you may have. Following the payment delays on my mortgage (two months), I plan on refinancing the loan which will give me another two months before payment is due (four months without a mortgage.)
Because rates have dropped, I will drop nine years from my current mortgage without increasing my monthly payment and keep my four months of payments in my bank account.
Refinancing student loans I still carry will be ideal as well, but I will wait until after the forbearance period for the same reason as above. I have the opportunity to build cash reserves while I face financial hardship but in the end, the term will drop for the same payment due to the rate change.
For those with short-term financial hardships, consider the low-interest options that many credit cards send out to their members. Capital One has consistently offered us the use of our credit line on fixed 18-month loan payments with 1% upfront loans. We had purchased a used car in the past on another credit card and transferred the balance to Capital One utilizing this offer. There’s no loan in the world (then or now) that would give us a 1% car loan even with 820 credit scores. You may have other debt or costs incurred during this period in which using a program like this (almost all of our cards send us offers of a similar ilk) can offer flexibility.
If you must travel, utilize flexible currency points, like Chase Ultimate Rewards, to procure inexpensive seats. For example, a $57 roundtrip (like I will highlight in another post) between LA and Chicago is just 3,800 Chase Ultimate Rewards points as opposed to the 30,000 United is charging for the same ticket right now.
This period is hard on everyone and if you need financial help, it’s out there. Communicate with lenders, utilize the programs that are available and think toward the future. It’s hard to think of a silver lining during the coronavirus outbreak but making adjustments to your financial situation may be one.
What do you think? Have you been affected by the coronavirus and the subsequent financial difficulty? How are you dealing with it? What do you think about lenders assisting their customers?