If you live in Canada, you’ve probably received lots of e-mails from your financial institution and other service providers letting you know they are “here for you” in these uncertain times.
I certainly have. I found these messages to be anxiety-producing, to be honest.
But, what does “here for you” actually mean? Perhaps, it’s not what you may think….
At the urge of the Federal Government, all 5 Canadian big banks announced they would offer up to 6 month of mortgage payment deferral to the most vulnerable people.
Many other lenders followed suit. Details were sparse, and when pressed for more information said lenders and big 5 refused to elaborate, saying each situation would be evaluated on a “case-by-case basis”.
Case per case basis is also all relative…
CBC has already reported many customers have faced outright denials or ridiculous processes and timelines.
How is that supposed to be helpful?
There is no free lunch
Whether it’s deferring your mortgage, car payment, personal loan or cell phone bill, lenders and service providers are not charities.
I understand you may be in a dire situation and panicking.
However, before you agree to a deferral, you also need to ask the following questions:
- How much is it going to cost me? Interests will most likely still accrue during the deferral period. You may also be charged administrative fees.
- How will it impact my credit score and file? Lenders could treat the deferral as missed payments on your credit file. Down the road, it will negatively impact you.
“Here for you”. Honestly, Canadians don’t need platitudes and empty promises. Right now, a lot of us need actual, tangible help.