A financial hardship letter is a short written explanation that tells your lender or creditor why you are struggling to make your regular payments and what assistance you are requesting. Whether you are behind on mortgage payments, debt payments, or other financial obligations, this letter can help you qualify for options like a loan modification, a temporary reduction in your payment amount, or a chance to temporarily pause your payments. Think of it as a standard document that provides all the necessary information, your account number, contact info, a summary of your current financial situation, and a specific request for help. Experts at Experian note that creditors rely on these letters to evaluate whether you are eligible for relief programs or modified loan terms.
A financial hardship is any event that reduces your income or increases your expenses so much that it affects your ability to meet financial obligations. Common examples include unexpected circumstances such as job loss, medical emergencies, a death in the family, or medical bills that consume your available money. When you explain your situation, paint a full picture without exaggeration. Mention your income, debts, and essential expenses like utilities or childcare. Avoid adding unnecessary details or a full backstory that does not relate to your payment challenges. Lenders want clarity, not drama, they just need to understand the facts behind your financial hardship.
Every hardship letter should include your name, address, and account number; the type of loan or mortgage involved; a description of the circumstances causing hardship; the action plan you propose such as a payment plan or temporary reduction; documentation that supports your claim; and your signature and contact info. Make sure your letter is polite, professional, and factual. Avoid phrases like “I cannot pay anything,” and instead explain what payments you can make or how you plan to resume regular payments soon.
Before writing, review these topics, tasks, practice notes to organize your thoughts:
Good organization makes it easier for your creditor or mortgage lender to follow your story and respond promptly.
Credit counselors can review your financial hardship letter before you send it. They will ensure you have included your payments, debts, and action plan, and that your tone stays constructive. A counselor can also help negotiate a mutually beneficial solution with your creditors if you are unable to keep up with monthly payments. At Credit.org, our certified counselors can guide you through hardship communication, budgeting, and repayment strategies to help you regain control and maintain regular payments moving forward.
Here is a sample letter you can model yours after. Keep your letter short, no longer than one page, and be sure to include your address, account number, and contact info.
[Your Name]
[Your Address]
[City, State ZIP]
[Date]
To: [Lender or Creditor Name]
Account Number: [#######]
Dear [Lender Name],
I am writing to request assistance with my loan due to unexpected circumstances that have affected my income and ability to make monthly payments. I have always made regular payments, but recent challenges, [briefly explain cause], have made that difficult.
I am requesting a temporary reduction or lower interest rate to help me stay current while I work toward financial recovery. My current financial situation is stable enough to cover a portion of my payment amount, and I expect improvement within the next six months.
I have attached documentation to support my request, including recent pay stubs and medical bills. Please contact me at [phone or email] if you need additional details.
Sincerely,
[Signature]
[Your Printed Name]
When describing your situation, include specific details. Mention your loan term, interest rate, and payment amount. Explain how long your financial hardship is expected to last. Describe what steps you are taking to correct it. If you are seeking a lower interest rate, a temporary reduction, or a payment plan, say so directly. Lenders need all the necessary information to tailor an offer. The Forbes Advisor guide recommends asking for a precise change, for example a three-month forbearance or a twelve-month modification.
To write a hardship letter that earns a positive response, focus on three essentials:
A good hardship letter reads like a standard document, not an emotional plea. Use plain language and keep your sentences short. Avoid technical jargon or unnecessary details that distract from your main request.
AI tools and online templates can be helpful for getting started, especially if you are unsure how to begin your hardship letter. They can offer examples of structure and phrasing that make your writing clearer. But your letter must still sound personal, genuine, and specific to your own financial situation. Never copy a template word-for-word or submit a letter that looks computer-generated.
If you use AI to assist you, treat it as a writing aid, not the author. Read through the draft carefully and rewrite sections in your own words so the tone reflects your real circumstances. Include specific details such as payment amounts, dates, and explanations that only you can provide.
Lenders and mortgage servicers review thousands of hardship letters every year, and they can quickly tell when something feels generic or artificial. A personalized message, written in your voice, carries more weight and credibility. When in doubt, review your draft with a certified credit counselor who can help ensure it sounds authentic and professional.
Discuss your financial situation without shame or blame. Lenders see hardship cases every day, and what matters most is that you communicate clearly. Mention your current financial situation, but skip the full backstory. Focus on important explanations that support your request for a mutually beneficial solution.
Your interest rate plays a major role in your monthly mortgage payments or other loan costs. If your mortgage lender offers a lower interest rate, even a small reduction can make monthly mortgage payments more manageable. The Freddie Mac Options to Stay in Your Home page explains how loan modifications and temporary reduced payments can help homeowners recover after hardship.
Keep your letter short, preferably one page. A concise standard document shows professionalism and makes it easier for the lender to review. Use maintained checklists or integrated notes to track what you have included. Remove any unnecessary details that might obscure your message.
Attach medical bills, termination notices, or other proof that supports your claim. Include your account number on each document and label them clearly. Show how your income and expenses compare to your debts and outstanding debt. Mention if your lender is already notifying you of late payments or late fees; this demonstrates your proactive communication.
End your letter with an action plan. Outline the steps you are taking to fix your situation, such as finding new employment, adjusting your payment plan, or working with credit counselors. If you are requesting a temporary reduction, explain when you will return to regular payments. A clear action plan helps your creditor see that you are serious about recovery.
Include recent pay stubs or unemployment benefits letters, medical bills or insurance paperwork, current bank statements, a household budget showing expenses and financial obligations, and any important explanations requested by your lender. Organize everything neatly and keep maintained notes of what you have sent.
Avoid adding unnecessary details or your full backstory, submitting an incomplete standard document, failing to sign or date your letter, using an overly emotional tone, or confusing legal references (for example, misusing practical law bankruptcy language). If you are experiencing technical difficulties, call your lender’s technical support or contact technical support through their portal to confirm receipt.
Send your letter to the correct address; check your creditor’s website for submission instructions. If you are mailing, include your account number on each page. For email or uploads, confirm receipt and keep proof. If your lender fails in notifying you after thirty days, follow up politely. Visit our guide on debt validation letters to learn how to maintain proper documentation.
During the next six months, your lender may grant a temporary reduction or pause in payments. Continue making regular payments when possible to show good faith. Keep your maintained notes updated with every call or message.
If your request for financial assistance is denied, do not panic. You can appeal or explore other mutually beneficial solutions such as a loan modification or a payment plan. Renters can visit What to Say to Your Landlord if You’re Facing Eviction or Can’t Pay Rent This Month? Try These 5 Immediate Solutions for additional guidance. Homeowners should reach out for Foreclosure Assistance through a HUD-approved counseling agency.
What is a financial hardship letter? It is a written request to your creditor explaining why you are struggling with payments and what help you are asking for.
Whom should I send it to? Your lender or mortgage lender, whoever services your loan.
Can I email my hardship letter? Yes. Many lenders accept them online. If you are experiencing technical difficulties, reach out to technical support for help with uploading.
Is a hardship letter legally binding? No. It is a request, not a contract, but it can start discussions that lead to a mutually beneficial solution.
Use this sample letter as your own standard document, customize it with your details, stay factual, and proofread carefully. Keep your letter short and your action plan realistic. If you are struggling to organize everything or need personal guidance, connect with a certified credit counselor who can review your draft and help you avoid errors that slow down your financial assistance request.
Need help now? Contact Credit.org’s Foreclosure Assistance for free housing counseling. Our certified counselors can help you create a plan, strengthen your letter, and guide you toward lasting financial recovery.
