If you've deferred your payments recently due to COVID-19 pandemic, you're certainly not alone.
According to the Canadian Bankers Association, more than 760,000 Canadians have deferred their mortgages as of June 30, 2020, and more than 445,000 have made requests to defer their credit card payments.
Hopefully, for those experiencing financial hardships during COVID-19 due to income loss, payment deferrals have provided some relief over the past few months, potentially extra cash flow and peace of mind. Most mortgage deferral periods given are up to 6 months, and most are 3 months for credit card, lines of credit and loan payments.
What happens when the payment deferral period is up, though? How do you stay on top of all your payments after the deferral period is over?
First, here's what happens across Scotiabank's products once the deferral period is up:
What happens once the mortgage deferral period ends?
*Update on COVID-19 support: New requests for mortgage payment deferrals can no longer be submitted.
- If your request for a deferral was approved, your deferral will continue for 6 months or until you cancel it or repay your mortgage in full, if that comes first (the “Deferral Period”).
- A mortgage payment deferral means that payments were skipped for the duration of the deferral period, during which interest continued to accrue to the outstanding balance of the mortgage. The accrued interest amount is then added to the principal balance of the mortgage at the end of the deferral period and incorporated into your payments when mortgage payments resume at the end of the deferral period. This means your mortgage payments after the deferral period will be higher. If your mortgage payment includes an amount for property taxes, this amount will increase at the end of your deferral period to cover the deferred tax payments.
- Following your mortgage deferral period, we’ll send you a notice with your new mortgage payment and updated cost of borrowing.
What happens once the credit card payment deferral ends?
*Update on COVID-19 support: New requests for credit card monthly minimum payment deferrals can no longer be submitted.
- Minimum payments must be made on time by payment due dates after a deferral period has ended (typically, up to 3 months long).
- Once that deferral period (3 months) is over, your regular interest rates will apply (during the deferral period on personal credit cards, interest rates were reduced by Scotiabank to 10.99%).
- Interest will have accrued over the deferral period – if you have a Scotiabank Mastercard account we charge interest on interest while for all other credit cards we do not charge interest on interest.
What happens once the line of credit deferral ends?
*Update on COVID-19 support: New requests for line of credit payment deferrals can no longer be submitted.
- Minimum payments must be made on time by payment due dates after a deferral period has ended (up to 3 months long).
- Interest will have accrued over the deferral period We do not charge interest on interest on our lines of credit.
What happens once the loan payment deferral ends?
*Update on COVID-19 support: New requests for auto and Scotia Plan Loan payment deferrals can no longer be submitted.
- Loan payments on personal Auto and Scotia Plan Loans must resume after a deferral period ends.
- Interest will have continued to accrue during your deferral period and the additional interest will be due at the end of your payment schedule.
How to stay on top of your payments after the deferral period
1. Sign up for Payment Alerts
The first thing you should do is enrol into Scotia InfoAlerts and add Payment Alerts into your subscription.
Life happens: it's easy to miss payment due dates (even if you've added them to your calendar), especially if you're juggling multiple bills due throughout the month.
Scotia InfoAlerts sends you app notifications, emails, or both for payments due on your bank accounts, credit cards, lines of credit, or business accounts with Scotiabank. You'll receive a reminder before a payment is due, a notification if you've missed a payment, and confirmation once a minimum payment is received.
Here is a rundown of the Payment Alerts you'll get:
- Minimum Payment Due. You'll receive this notification before the payment due date, unless you've already made your payment.
- Minimum Payment Missed. If you missed your minimum payment, you'll get a notification after your payment due date.
- Payment Made. Once you've made your minimum payment, you'll receive a confirmation notification that your payment was received.
2. Schedule recurring transfers online
For any fixed, regular payments (monthly or bi-weekly), set up recurring transfers. It's a simple way to effortlessly stay up-to-date on payments.
Set up is easy (full instructions here). Simply choose the account from which your funds will be transferred, the timing of the transfer — every two weeks, for example, or on a specific date of the month — and the account to which you'll be making the repeated payment. Done.
3. Set up pre-authorized payments
Another method to add to the mix: pre-authorized payments. Pay your bills automatically without even having to think about them. Pre-authorized payments are perfect for any regular bills that fluctuate month to month (think: credit cards, lines of credit and utilities).
You can opt to cover your minimum payment or pay the balance in full. Choose whatever makes you the most comfortable.
4. Visit a Scotiabank branch if you're still struggling to make payments
We understand that for many people things have still not returned to “normal," financially or otherwise. If you find yourself still struggling to keep up with payments, you may benefit from other options such as debt consolidation or consider another product such as transferring from a credit card to a lower interest rate line of credit. Your high-interest debt could be transferred to a lower-interest rate account or simply combined so that payment should be easier to plan and manage.
Come into a Scotiabank branch to discuss all your available options. Here's how you can find the branch closest to you.
5. Past due? Call Scotia Helps for more options
If your deferral periods have already ended and you've started to experience overdue payments, we're here to help. Contact us as soon as possible and we'll discuss options we may have for you.
Legal Disclaimer: This article is provided for information purposes only. It is not to be relied upon as financial, tax or investment advice or guarantees about the future, nor should it be considered a recommendation to buy or sell. Information contained in this article, including information relating to interest rates, market conditions, tax rules, and other investment factors are subject to change without notice and The Bank of Nova Scotia is not responsible to update this information. All third party sources are believed to be accurate and reliable as of the date of publication and The Bank of Nova Scotia does not guarantee its accuracy or reliability. Readers should consult their own professional advisor for specific financial, investment and/or tax advice tailored to their needs to ensure that individual circumstances are considered properly and action is taken based on the latest available information.