How to Deal With Loans, Insurance & Mortgages During COVID-19

Updated: Jul 4, 2024

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The coronavirus crisis has affected all verticals, let alone individuals. More than 35 million people in the US lost their jobs or got furloughed by their employers. However, people still have their financial obligations while they are unemployed and quarantined. There are bills, insurance rates, mortgages, loans, and car payments to be paid.

It is only logical to be concerned about your finances. Making ends meet is going to be hard, but it is not something that you can’t achieve. Once you know all about the options you have at your disposal and learn a few tips and tricks, you will be able to stay on top of your finances and make it through the crisis.

Below, you will find everything about financial packages that came as a response to the coronavirus crisis and discover a few tips and tricks to efficiently deal with loans, insurance, mortgages, car payments & more.

Economic Relief Programs in the US

The government of the US addressed the coronavirus pandemic determined to help citizens in the best possible way. There are different economic relief programs in the US that can benefit both individuals and businesses. Let’s focus on the programs that can help you as an individual.

First of all, you should not worry about paying taxes until July 15. The government delayed the tax payments from April 15 to July 15 (See Details). There will be no interest or penalties applied to citizens who decide to benefit from the delay. You can use the cash to cover more pressing expenses for a given period. However, plan ahead, as you will have to pay your taxes before July 15.

Meanwhile, the government issued another relief program defined by the CARES Act legislation. You, as an individual, have the right to a $1,200 tax rebate. The $2,400 tax rebate is reserved for joint filers, with an additional $500 per child.

The federal government released additional funds to expand unemployment insurance coverage. All unemployed citizens will receive an additional $600 per week payment up to 4 months.

Making Payments on Time

If you are facing some hard times, always remember that you are not alone. Whatever you do, you might not be able to make payments on time. There are many people out there facing hardships. Most lenders are offering help. The two most common relief programs found at lenders are:

  • Waive late fees
  • Deferred payments

You should contact your lender to check out if any of the programs are available. Keep in mind that there will be a lot of consumers doing the same. Phone lines may be busy. It might be a good idea to try to contact a lender via email, live chat, or any other available customer service channel.

Don’t be afraid to ask your credit card issuer for help. Most of them are ready to meet you halfway, and we can see more lenient policies being adopted each day. Beside waived late fees and deferred payments, there are several other options you have at your disposal. You can ask for:

  • Waived penalty fee – The coronavirus has disrupted the income of cardholders across the states. Most card issuers are aware of this, and they are willing to offer breaks. Ask for waived penalty fees to prevent your account from being charged with fees you’ll have to pay one way or another.
  • Waived penalty APR – While penalty APRs vary from one card issuer to another, there is one thing that all issuers have in common. Penalty APR is pretty high, and having to pay it when your finances are already dwindling could be devastating. Ask your issuer to waive your penalty APR especially if you know you won’t be able to keep up with your bills the following months.
  • Credit line increase – We all know that a credit card can easily become your last financial lifeline. Once you drain all your cash, the only thing you will have left is your credit card. This would be a perfect time to ask for a credit card line increase. An ideal scenario would be to get it without the issuer making a hard pull. However, if this is your last option, you should not worry about your credit score. Once the pandemic is over, you can get back to repair it.
  • Waived annual fee – Now would be a good time to ask your credit card issuer to waive the annual fee. You stand better chances if you are a loyal and valued customer, but even if you are not, you stand to lose nothing. Tell the issuer that you want to remain a customer and that, due to COVID-19, you would appreciate it to waive the annual fee. If your issuer is unwilling to waive the annual fee, there is one thing you can do. Ask for a product change. Downgrade your account to a credit card that has no annual fee. This is a significantly better option than closing your credit card as the action will result in your credit score suffering a blow.
  • Change due date – Some issuers are also willing to allow you to change your billing due date. This can help you juggle your finances more efficiently and help you reduce strain to your budget. Change your due date so that it comes after you get paid so that you can quickly pay your bills.

If you can’t make payments on time because you have insufficient funds, check your purchase history. Thousands of events got canceled because of the coronavirus pandemic. If you have purchased tickets for any of these events, you can ask the venue for a refund.

Sometimes the venue will give you a hard time about a refund. Don’t worry; you can contact your credit card issuer to contest the charge. Most often, the issuer will be able to sort it out with the merchant, and you will get your hard-earned money back.

RELATED: How to Use COVID-19 Stimulus Help

Credit Card Benefits, Perks, and Bonuses

Credit card issuers keep tabs on spending habits. The COVID-19 impact can be seen in consumers spending behavior as well, and issuers are aware of it. This is why some of the reputable credit card companies custom-tailor their offers.

It would be best to start by reviewing the changes your issuer made. Maybe you will get an extension and be able to unlock all those handy welcome bonuses and offers. Some issuers have updated the list of perks and benefits. You should do a little bit of digging as this practice will enable you to find opportunities and capitalize on them.

RELATED: Be Aware of New Credit Card Fraud During Pandemic

Saving a bit here, and getting few free bucks there, is especially important during these times of uncertainty when every dollar counts.

Borrow Money at Affordable Rates

There are two attractive opportunities on the market if you are looking to borrow money at affordable rates. Small loans at reduced rates are available at Capital Good Fund and US Bank. To get these loans, you don’t even have to submit proof that your finances are affected by the COVID-19 crisis.

In the US Bank, you can apply for two loans if you have an open account. The Simple Loan is a very small loan ranging from $100 to $1,000. The lender has significantly reduced the loan fee. The starting fee is $12, and it is reduced for every $100 borrowed down to a minimal $6. The pay off loan term is three months.

US Bank also offers the Personal Loan, readjusted to address the crisis. Before the coronavirus pandemic, the loan had a 1% prepayment loan fee. If you take it now, there will be no fee if a loan is less than $5,000. The loan payoff term is 48 months, with a very affordable APR of 2.99%.

Capital Good Fund relief packages are available in Florida, Rhode Island, Massachusetts, Illinois, and Delaware. The fund offers great small loans. The loan can be anywhere from $300 to $1,500. APR is fixed at 5% for all approved borrowers, and all borrowers benefit from deferred payments for the first three months.

The fund made these loans available to consumers in the states mentioned above. The loan is entirely fee-free, meaning there are no applications, prepayments, and closing fees. Consumers are not required to deposit any collateral to get the loan.

Credit unions also offer crisis-friendly loans to consumers. These loans are attractive because they often come with an APR below the industry average and more flexible terms.

Bear in mind that we are only listing the options you have on the market. Feel free to expand your research to find other valuable opportunities as there is a chance we’ve missed it.

Don’t forget to check Savings & Checking accounts, too.

Balance Transfer: A Good or Bad Idea During Crisis?

You can look at balance transfer as financial aid. It can help you consolidate your debt and make the cost-efficient repayment plan if you know when and how to use it. Should you do it now during the COVID-19 crisis? If your budget is already spread too thin, a balance transfer can help you avoid paying high-interests that can easily spin out of your control.

When moving your debt to another card, it would be best to try and get a card with 0% APR on balance transfer. This puts you in a position to start paying off your debt without spending a dime on interest rates. Some cards even offer a grace period of one year. This will set some of your finances free, and you will be able to spend it on more urgent matters.

Keep in mind that almost all issuers will charge you for moving your debt. The fees range from 3% to 5%.

One more thing. The issuers expect you to have at least a good credit score before they allow you to do a balance transfer to a credit card with low or zero APR.

If you don’t have a good credit score, you have one more option left. Contact your credit card issuer and ask whether it is possible to do a balance transfer to a card with a lower APR. It’s not 0% APR for a year, but hey, you will still save some cash by reducing interest charges. You can pay other bills or cover other essential expenses.

Make Minimum Payments or Wait for Deferral Period to Expire?

It can be tough to make financial decisions when the bills start piling up, especially if you lost your job or got furloughed. Under these circumstances, the credit card issuer’s deferral period can seem like a good idea. We urge you to read the fine print in the emails and offers you receive.

Some issuers will offer you to skip a few payments while still keeping interest charges in play. The question is – Are you benefiting from a deferral if your interest continues to accrue month after month? If you choose to skip some payments while the interest is accruing, your minimum payments will become larger, even if you put your credit card aside and stop using it.

If owing more money after the crisis is over is the only option you have, there is nothing to think about, go for it. However, if you can afford to make minimum payments, you will do yourself a favor and save a lot of cash on interest.

Insurance Companies Are Offering Payment Help

When it comes to making home or auto insurance payments, there are relief programs for them. Auto and homeowners insurance companies offer a variety of financial assistance programs to consumers ranging from grace periods to custom-tailored repayment plans.

There is no unified program across the insurance landscape. You will have to contact your insurance company to learn whether there is an available program for you. The relief programs are not automatic; you will have to place a request for a special payment plan or grace period to benefit from them.

Mortgage Relief Programs

If you are concerned about how to pay your mortgage, we have some good news for you. The Coronavirus Aid, Relief, and Economic Security (CARES) federal law enables homeowners with federally backed mortgages to benefit from mortgage relief programs.

Your loan servicer or lender can not foreclose on you for two months after March 18. If your finances are directly affected by COVID-19, you are entitled to request a forbearance for up to 6 months. The same procedure that applies to the situation with insurance companies applies here. To benefit from these programs, you must contact your lender or loan services and officially request forbearance.

Now that you know what options you have, you can make a plan and do everything in your power to come out of this crisis as financially healthy as possible. Let us remind you that most of the relief programs, especially those offered by lenders, loan servicers, and insurance companies, do not apply automatically.

Keep your tabs open and get informed as soon as possible. If you are eligible for a program, assess whether it will help you or only pile up your debts and snowball you to bankruptcy.

What Self-Employed & Small Businesses Should Do?

There are many ways for small businesses and self-employed individuals to get help from the government during the COVID Pandemic. Read here what options there are.


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