For example, you may consider refinancing an underwater mortgage through HARP, consolidating other debts, or selling luxury items to free up some extra money and pay the debt.
Keep in mind that company you are contacting may not be the same as the original lender. Make sure to contact the company listed on the bill.
On your first line, write your full name. Go down a line and write your address on the next two lines (the second and third lines). Write in your lender’s name (the name of institution, not the individual recipient). Skip another line, then write “Loan number:” and then your loan number. This number can be found on your loan contract.
Different lenders have different standards for what exactly qualifies as financial hardship. In general, valid hardships include the following: Loss of income/job. Sudden illness/medical expenses. Death of immediate family/other borrower on the loan. Divorce/separation. Military service. Legal expenses. Changes in loan payments (ARM adjustment). An example of an invalid hardship is that you were misled in the loan agreement or were unaware of the terms of the loan. [2] X Research source
If your interest rate has increased to an unmanageable level, consider asking for a reduction in that interest rate. If you are behind on your payments, ask for your lender to grant you a temporary reduction in payments and a plan to repay the back payments over time after your situation improves. When you do this, make sure that the amount you offer is something you can actually afford right now. If your home is less valuable than the balance of your loan (due to falling home prices), you may be able to get your lender to decrease the balance of your loan. [3] X Research source Make sure to state your request in clear terms. For example, don’t say, “I want lower payments. " Instead, try saying, “I would be able to afford payments of $500 per month for the next three months, at which point I could resume paying my current payments. "
Thank your lender for their time and consideration at the end of the body of the letter. [8] X Research source If the loan is in more than one person’s name, each borrower should sign the bottom of the letter. [9] X Research source
For example, don’t mention if your financial hardship is partially due to a drinking or drug problem. Make sure to avoid complaining in the letter because these types of letters are often ignored.
It may be helpful to type your letter, rather than write it by hand, because of the spellchecker included in word processors. Doing so will also make revisions much simpler.
