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It’s been a while since we’ve talked about CEBA loans.  Some updates to the program may affect you, so you may want to review the following details before making any repayment decisions.

What’s New?

The program repayment deadlines have changed.  The Government of Canada has announced that the December 31, 2022 forgiveness repayment deadline has been extended to December 31, 2023, for eligible CEBA loan holders “in good standing.”  This extension applies to both the original $40,000 loan, and the later $20,000 extension (total of $60,000).

No details have been provided to explain what requirements a CEBA loan holder needs to meet to be considered “in good standing.”  The assumption is that this means the loan holder has not violated any terms of the loan or the terms required to access the funds in the first place.  However, without confirmation from the government, we cannot say with certainty that this is, in fact, what they mean by “in good standing.”

Is there any reason not to repay the CEBA loan earlier than the deadline?

Since the loan is interest-free until December 31, 2023, there is no advantage to repaying the loan earlier than required.  However, if you repay the loan early, you should still qualify for the available debt forgiveness.

What happens if I can’t repay my CEBA loan by the deadline?

According to the program rules currently in effect, you will be charged interest of 5% per year on the balance, beginning January 1, 2024.  You will also not qualify for debt forgiveness, and the entire principal will be converted to a term loan, repayable in principal payments determined by your financial institution.