Use these free letter samples as templates for your formal notification.
A loan modification hardship letter needs to be written properly if the consumer wishes to have his or her loan modified in any way. A succinct and well-thought out hardship letter that has the right information and no extra information has a better chance of having the request approved.
It’s important to explain the hardship, so the receiver understands that it is genuine, but the borrower should not try to write a tragic novel and go on and on about their depressing situation.
This may serve to make the lender toss the letter in the trash, because it doesn’t sound genuine. The borrower should only give the information the lender needs to know. This may be a reduction in income, unexpected medical expenses or temporary loss of job.
The borrower should also explain what he or she has done to improve their financial situation in order to continue making the required payments. For example, they may have gotten a part-time job or reduced their monthly expenses by stopping a subscription to a gym.
The letter should be addressed to the lender or to the person in charge of loan modifications in a lending institution. The borrower can call the institution to find out the proper person to whom the letter should be addressed. If the car loan is from a bank or other lending institution, the borrower should find out if there is a form they need to fill out to accompany the letter.
Some tips for a successful personal loan modification hardship letter are:
• The letter should be no longer than one page
• The facts should be stated clearly, objectively and succinctly
• The borrower should clearly state that he or she wants to resolve the debt
• The documentation such as medical bills or loss of job records may be attached or enclosed with the letter
• The creditor should be thanked in advance for taking the time to consider the request
Some things to avoid when writing the loan modification letter are:
• Exaggerating the hardship or overdramatizing the situation
• Making claims that are not true
• Making promises that the borrower can’t keep
• Blaming the creditor for the financial difficulty
• Giving ultimatums such as plans to file for bankruptcy if the lender doesn’t help
The borrower should not try to blame someone else for their financial difficulty. For example, they shouldn’t blame the creditor or say that they were misled on the terms of the loan. This is not believable and will not help.
The borrower should also be specific about the problem and solution. For example, he or she should say they lost their job and are looking for another. They shouldn’t say they are doing everything they can to get another job. It’s too vague and sounds false.
Below is a sample of a personal loan modification hardship letter. It should be sent via certified mail with a return receipt, so the sender will know when it was received. He or she should also keep a copy of the letter.
Sample Hardship Letter for Loan Modification
Name of Borrower
Address of Borrower
City, State, Zip Code
Name of Lender
Name of Lending Institution if Applicable
Address of Lender or Institution
City, State, Zip Code
RE: Request modification of my personal loan
The aim of this letter is to reduce my personal loan payments from AMOUNT to AMOUNT for the next six months. When I got the loan, my income was AMOUNT, but because of an illness, I lost my part-time job, so my income is only AMOUNT today. I have enclosed my medical report that clearly shows I was hospitalized for four days.
I am fully recovered from my illness and plan to get another part-time job to supplement the income from my work-at-home job. For the past two months, I have used my savings to maintain my car loan payments, but my savings account is almost empty.
I believe I can continue to make full payments in about six months starting on DATE if I can have some reduction in the amount I pay during that time. I request to reduce my payment by $150 from $400 per month to $250 per month for six months starting on DATE and ending on DATE. As of DATE, I will continue to pay the full $400 per month.
Thank you for considering my request. I can be reached at Phone Number or at Email Address if you have any questions or require any more documentation.
Signature of Borrower
Printed Name of Borrower
List of Enclosures: Medical report
By Andre Bradley