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With the arrival of our new Prime Minister Justin Trudeau, 2016 has been marked by several changes to our country’s income tax policies and other government benefit programs. This includes significant adjustments to the CCTB (Canada Child Tax Benefit), which as of July 20, 2016 has been officially named “Canada Child Benefit”.

We receive daily questions about different types of loans and the application processes that accompany them. One of the most common questions we receive is, “Am I eligible for a loan if I am currently receiving the Canada Child Benefit? “. The answer to this question varies from lender to lender, so here’s what you need to know about applying for a loan when your income comes from the Canada Child Benefit.

What is the Canada Child Benefit (CAC)?

The Canada child benefit is a type of payment that families or single parents can receive when they have one or more children under the age of 18. Some aspects of the benefit were modified as of July 20, 201. These changes were implemented with the goal of simplifying but also improving the program for current and future beneficiaries. Some of these changes include:

• A less complicated process (families will usually receive a specific monthly amount over a 12-month period).
• Different payment standards (families with lower incomes will receive a larger amount than those with higher incomes).
• An increase in the amount of the benefit (an average of $ 2,300 for 2016-2017).
• The beneficiary is now tax-free (families / parents will not have to pay tax for CEA on their tax returns).

The amount of the benefit depends on certain criteria, including the number of children you (and your spouse / partner) have, your age and your annual income. For example, families earning lower incomes (less than $ 30,000 per year) should have an average of $ 6,400 per year for each child under 6 years of age. Once the child (ren) reaches the age of 6 to 17, the benefit amount will be reduced to $ 5,400 per child per year. However, families with significantly higher incomes (more than $ 150,000 a year) will surely receive less. There is also an additional $ 2,730 per physically and mentally handicapped child who qualifies for the EHP (Child Disability Benefit).

In addition to all other changes to the Canada child benefit, the Canada Revenue Agency has issued a more specific “benefit calculator”, which requires a parent to enter more detailed personal information but gives a calculation more accurate of the amount the family will receive annually.

How can I receive the Canada Child Benefit?

Parents who want to become eligible for CAOT must file their income tax returns every year, regardless of their income, even if they do not currently earn any income. This rule also applies to their spouse or their spouse if this is the case. Once the parent is approved for the benefit, they will receive payment in monthly installments from July of the current year to June of the following year. Once the parent and spouse have filed their tax returns, the sum of their benefits will be recalculated starting in the next month of July, based on the details of their tax return, until the child or children reach the age of 18.

Why would someone receiving CEA need a loan?

There are many reasons why people have to apply for loans. Even when the government gives them some extra money annually. Families receiving ACE are no different from other families. In fact, based on parents’ current income and the number of children they have, it can be very difficult to support a family while managing all other possible expenses such as mortgages, car payments and so on. Some parents may even need a loan just to cover the costs of their daily expenses, such as shopping, rent or utilities.

It can be particularly difficult for single parents to have a high enough income to raise their children and finance their home, car and other necessary expenses, so a loan can help a lot in times of financial uncertainty. In particular, for multi-member families, parents and children. Emergencies can occur, whether medical or financial, which may require a loan to cover the costs associated with these situations.

How can I be approved for a loan I need?

For most lenders, banks and other organizations, qualification standards vary from loan to loan. However, the standards for their new customers remain relatively the same. In other words, any legal lender will want to know first and foremost if you are financially stable enough to pay back any money that is loaned, as well as the interest charges that apply. Depending on your lender, the application process may include the following checks:

• Your credit (file, history and rating)
• Your financial records (history of debt / bankruptcy, income etc.)
• Your employment history (usually from the last 2 years)

Since these categories are probably the most important points to check, other qualification categories may be subject to verification. It is preferable that all your financial and personal information be up-to-date and organized before applying. Also remember that there are several illegal lenders who are crooks and who might actually be trying to rob you, so make sure you know about the financial scams while looking for the online lenders.

Once you have found a legal lender, there are some simple actions you can take to put more chances on your side to be approved, in addition to being organized:

• Do some research and shop around the lenders. There are many different lenders that cater to all types of borrowers. Some have stricter qualification standards, such as having a high credit rating. If you do not have a high rating, there are other lenders who do not use this one as a deciding factor. Just be sure to read previous customer reviews and research this lender in the Better Business Bureau database to confirm that it is a real business.
• Calculate your debt / income ratio. This is a good way for you and your lender to know if you are financially stable to cope with the costs of a new loan. Add up the average total cost of your monthly payments and other debts, then divide it by your regular monthly income. You will then have a debt / income ratio. Ideally, your ratio should reach 30 to 35%, and lower if possible. If your ratio is higher than this, it may be better to avoid applying for a loan until you and your spouse can increase your income or find another way to lower your ratio.
• Find a co-signer you trust. Having a close friend or family member can help increase your chances of approval. Make sure that person is also financially stable and ready for the lender’s verification process.
• Check your credit. As mentioned above, many lenders do not check your credit. However, you can do it yourself and this is a great way to stay financially stable and manage debt.
• Pay off your debts. This is one of the most important things to do before making financial decisions. If you already have other debts (credit card bills etc.) it is better to pay them off before applying for a new loan. If you can pay off your debt and allow you to pay a loan at the same time, this is a better time to apply.

Loans and your Canada child benefit.

Depending on the number of children you have and their age, the amount you receive may be advantageous. This combined with your annual income should help you be approved for a loan you need. Provided that you and the spouse (or only you if you are a single parent) have the means to repay the costs of the loan payments. In this case, you should find a legal lender that will meet your needs.

Once upon a time bankruptcy meant the end of your financial life. In the new economy, however, with the current state of the unemployment rate, financial institutions understand that bankruptcy is sometimes a responsible choice. Nowadays, finding a lender who would approve a car loan is no longer an insurmountable obstacle. Here are some details, tips and advice that can help you get a car loan if you try to rebuild your credit after a bankruptcy.

Choosing the right lender

• First, you need to find a lender who is willing to work with bankrupt individuals. This is not as difficult as it was, but it is still worth doing your research and informing you about the lender that is the best choice for your particular situation.
• You can consult with the dealer from whom you plan to buy your car to see if qualify for direct financing, but depending on your situation, it may be that what it offers you has more negative points than positives.
• Find out what’s ahead before starting the process. Better to be prepared and avoid unpleasant surprises. Take advantage of your internet connection and look for lenders and interest rates in your area. Even with a bankruptcy on file, a competitive interest rate could wait for you.

Have reasonable expectations

• Although your interest rate may be competitive, it is likely to be even higher than you expected. Recent changes in lenders’ attitudes toward bankrupt individuals do not erase the reality that financial institutions will consider bankruptcy a risk factor. This means that the base rate they will offer you will be higher than they would offer to an individual who has no bankruptcy on file. Do not be discouraged. If you keep healthy financial habits you could refinance in a few years to get a more attractive interest rate.
• Be realistic in your expectations as well as in your choice of vehicle. A lender will not approve a loan for a luxury car, so do not try to borrow $ 50,000! After a bankruptcy it is reasonable to limit yourself to a convenient and reliable car that will cost you at most $ 10,000.

Let’s talk about numbers

While it is necessary to expect a heavier interest rate than normal, you should not accept the first loan you are offered for fear of being refused elsewhere. If you think the rate you are being offered is unreasonable, do not hesitate to look at another financial institution, negotiate or fight for the best price you can get.

A large down payment is an advantage. The more you can pay for the vehicle of your choice, the better your chance to get by. A down payment of 20% or more demonstrates to the lender that you are serious and that you are ready to make responsible financial decisions.

Now that you know what to expect and have the information you need to make informed decisions, finding the right lender for your financial situation should be child’s play. Take the time to inform yourself, have reasonable expectations and you will be the owner of a vehicle in time to say it!

What is a debt management program?

When you start a program like this, it allows you to make a payment that not only covers all your debts, but is adjusted to your means. The main purpose of this program is to help you repay your debts without stress and allow you to save the most money by avoiding all fees and interest. Before deciding whether the program is right for you, know that it applies only to unsecured debts. Unsecure means: credit card, lines of credit or other loan that required a guarantee when you requested it.

In order to start the debt management program, you must contact a credit advisor who will help you make an agreement between the company that you owe money and you.

• Once you have found a credit counseling service that’s right for you, an advisor will work with you to build a plan specific to your personal situation.
• Your advisor will then contact creditors to arrange an affordable monthly payment so that you can pay off debts as soon as possible.
• Also, your advisor asks creditors to lower fees and interest costs. Very often, they will accept.

Essentially, such a program will allow the consolidation of unsecured debts into one monthly payment, which will allow you to get back on track quickly and free you from your debts.

How does the debt management program work?

Working with an advisor on a debt management plan that will be customized to your financial situation might be what you need. Your advisor will help you step by step by providing you with all the details. That’s how this program works:

• The program will not pay the debts for you. In fact, it’s the opposite. The program ensures that creditors recover the money you owe them.
• Your creditors will still accept payments over a longer period than expected (no more than 4 years). This will allow you to decrease the amount of monthly payments. In some cases, the creditor could even reduce or remove the interest associated with your debt.
• Your monthly payments will be simple and easy to manage, made by phone, debit card or postal money order.
• Remember that the program does not apply to all debts.
• The advisor’s agreement with the creditors is purely voluntary and not legally binding.

What are the advantages and disadvantages of a debt management program?

Advantages :

• Reduction or disappearance of interest on debt
• It takes a maximum of 4 (sometimes 5) years to completely pay off all your debts that are part of the program. This is much faster than trying to pay off your debts alone.
• One monthly payment. It is much easier and less stressful to manage a single payment, as opposed to having to pay several payments to several creditors.
• Your advisor will talk to the creditors in your name, which will save you from dealing with them personally.
• The program includes credit cards, bank loans and corporate loans.
• If you can not consolidate your loans because your credit score is too low, then this program is a great solution for you.

Disadvantages:

• Creditors respect the program voluntarily, which means they can withdraw from their promises at any time.
• You will have no guarantee from your creditors and they can still send the collectors after you.
• You will not be able to get a new line of credit; if you opt for a new credit, this could affect the success of the program. Before starting a debt management program make sure you will not need new credits in the coming years.
• The effect of the program could be seen only after a few months. This means that the creditors will not receive the payments right away. You will continue to make regular payments to avoid missing a payment.

A debt management program is an excellent option for those who can not get out of debt or can not pay all of their debt. This program will allow you to repay your debts and regain some financial confidence. The main goal of the program is to provide you with the necessary tools to have a better management of your finances in order to avoid such incidents soon. Your advisor will teach you how to make a budget, how to meet it, and how to monitor your expenses and financial goals.