Writing A Hardship Letter Loan Deferment

In writing a hardship letter loan deferment, you will need to fully demonstrate what is your current financial situation. It should be noted that in order to be able to apply for some sort of loan deferment, you will have to meet a number of specific criteria. Usually, such a deferment will apply to mortgage payments and they are designed to help people avoid foreclosure.

In your letter, you will have the chance to highlight your circumstances, and all that you have done to turn it around. It is your chance to show that you suffer from an “acceptable” hardship. Mainly, it is an opportunity to prove that, as soon as you can, you will continue with your payments and repay what you owe.

Acceptable Hardships

There are a number of acceptable hardships, including:

  1. Involuntary reduction in income through loss of job or change in hours
  2. Death of a family member
  3. Illness of a family member
  4. Separation or divorce
  5. Forced relocation for work
  6. Shock from the adjustable rate reset
  7. New and higher expenses

How to Write a Convincing Letter

Your letter needs to be short and to the point, while providing your lender with a clear understanding of what is going on. Remember that lenders constantly receive this type of letter, with people looking for ways to keep their home if they experience some difficulties, so yours has to stand out. Here are some key tips:

  • Keep it short and sweet.
  • Clearly describe your hardship and why you are in that situation. Tell the lender when your hardship started, which should be linked to when you began to have payment difficulties. Make sure that the connection between missed payments and your hardship is established.
  • Explain what you have done and/or doing to improve the situation.
  • Present a plan for you to get back on track.
  • Make it clear that you are responsible and motivated to get back on track, and showcase that you are a pillar of the community, for instance, by discussing your volunteer work or other community activities.

You are not alone in your hardship. In fact, although the recession is said to be over, many people are having some kind of difficulty. Banks are quite forgiving if you communicate with them and that you are honest about your situation.

Last but not least, be aware of the fact that writing a hardship letter loan deferment is just the first part of your overall loan modification. Your lender will get in touch with you to request proof of your new income and they will also want a full financial statement. If you do contact your lender with a request for loan deferment, make sure that you have studied the process properly and that you are armed with negotiating tips to help you be more likely to be successful. Make sure that you also look into the different approval guidelines of your lender, and whether the stimulus home saver plan implemented by President Obama is applicable to you. This way, you will know exactly what you are and aren’t entitled to.

Hardship Letter Loan Deferment Example

{Your Name}
{Your Address}
{Your Phone #}
{Your Loan #}


To Whom It May Concern:

My name is {Name} and my account is {number}. I am writing to request a one-time deferment of my loan for the next {amount of time} due to severe hardship.

For the last {amount of time}, I have paid {amount} of my loan every {interval}. I have always made an effort to pay my installments on time and in full. However, as of {date}, I was met with the unexpected hardship of {brief description of financial, professional, family, or medical hardship}. Since the incident, I have only been able to afford the most basic necessities.

I am making every effort to get back on my feet, and I already {lined up a new job, recovered from my injury, etc.}. If I can defer my loan until {date}, it will allow me to recover from this incident and return to my normal payment plan by {date}. I am open to installment additions and plan adjustments at that point, and will try to accommodate any necessary changes.

Attached are my financial statements and {medical bills, pay stubs, etc.}. Thank you for your consideration and understanding. I hope to hear from you at your earliest convenience.

Thank you,

{Sender Name}

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