How to Maintain Salary Loan Repayments During a Global Emergency

April 13, 2020

In the Philippines and many other countries across the world, salary loans are part and parcel of everyday life for people who struggle to make ends meet with their basic salary. The repayments for those loans need to be made regularly in order to prevent default charges or penalty payments, but as global unemployment is already beginning to rise due to the pandemic, many people may be looking for a way to make sure they can still afford to pay off what they have borrowed. Here are some tips on how you can manage salary loan repayments in times of emergency.

Speak to Your Loan Providers

Most governments have now arranged at least some form of financial support for the economy as a direct result of the covid-19 outbreak, this can include things like allowing loan banks and other loan providers with option of giving their customers short term payment holidays or reduced interest charges. If you are in financial difficulty and know that you are going to struggle to make any existing repayments on a salary loan you already have, the best option is to speak directly to your loan provider so that you can arrange a solution that works for both of you. Though they may not always offer you terms that are ideal, the chances are they will be happier with you making a small contribution to your existing debt, rather than nothing at all. Contact your salary loan provider via phone or email to ask about the kind of help they may be able to offer you.

Compile a list of cutbacks you can make

This could be everything from switching brands at the supermarket to cancelling a few subscriptions you don’t use any more. Basically, any money that you can save can be put towards your existing salary loan repayments and will ultimately prevent you from getting in to more and more debt. Start with things that you know you can definitely live without for a few months. For example, transport costs. If you are in a part of the world that has closed or significantly cut back on its public transport due to the lockdown, you can potentially use any money you would have ordinarily spent on transport as a way of paying off a little bit of your existing salary loan. Some transport providers are even issuing partial refunds on things like season passes, so it makes sense to investigate this before you accept that you’ve simply lost the money. Meals out in restaurants, trips to the cinema, live music concerts and public social gatherings are also going to be unavailable for the foreseeable future, meaning that some of your monthly entertainment budget can be used towards paying off existing debts you may have. Ultimately, assuming that you can not do the things you are used to is a good starting point and making a list of all the areas of your life that have been effected by this situation will help you to work out how much money you can potentially use in a different way.

Make Plans to Generate More Income

This could involve starting an online business from home, selling some unwanted household items using online marketplaces or looking into the kind of jobs you may be able to do when the lockdown has been officially lifted. If you are working in an industry that has been hit particularly hard by the economic impact caused by the global pandemic, it may be a good idea to consider other alternatives as a short-term solution. Many people who work in the entertainment industry also have jobs in sectors such as hospitality and retail, so it could be an option to move into this type of work until you are able to return to your usual area of business. This is a particularly important step, especially for those who have asked for a repayment holiday from their creditors as they will need to make sure they are eventually able to start paying off what they have borrowed.

Downsizing and Relocation

If you are seriously affected by the economic impact of the Covid-19 situation, it may be a good idea to consider downsizing your property, vehicle or even relocating to a cheaper area. This is quite an extreme measure, but it can be a good way of saving money quickly. Though people are still unable to move around at present, you can still look for cheaper alternatives to your current home or car by browsing online marketplaces. You can also look at things such as the cost of living by comparing the price of goods and services in different areas. Those living in affluent areas may struggle more with this than those in areas that already enjoy a relatively low cost of daily living, but this will undoubtedly impact on everybody quite significantly. Downsizing doesn’t necessarily have to mean making huge sacrifices, it just means that you are reassessing your priorities to make sure that you are getting the most for your money.

Pause payments with other creditors

Generally speaking, you should always try to pay off your most expensive debt first. In some cases, loan providers may be unable to offer you a repayment holiday, but your credit card company might. This means that you can potentially give yourself some breathing space and a little extra money to pay off what you have borrowed from a salary loan provider. If you take a look at your existing debts, go through each providers website to look for details of any help they are potentially offering people who are having problems making their repayments. Though you shouldn’t expect to be allowed to take payment holidays as standard, the vast majority of reputable and legitimate lenders should be able to offer you this option, as the governments have largely provided a substantial amount of economic stimuli to prevent the situation from getting any worse.