How to write a hardship letter to a lender or card issuer (with template)

What is a hardship letter?

A short letter to a creditor explaining the event that made your payments hard to keep up with, and asking for a specific change to your terms.

Experian describes it as a letter that "lays out the financial circumstances" making payments hard and proposes a solution ^[1]. Creditors generally look for an event outside your control, such as losing a job or a divorce. Experian says a voluntary job change or nonessential spending usually doesn't count ^[1].

You don't always need a letter. Experian notes that many lenders have their own process for customers in hardship ^[1], and American Express, for example, takes enrollment in its program online or by phone ^[5].

When should I send a hardship letter?

As soon as you can see a payment you won't make, ideally before it's due. Lenders say the earlier you reach out, the more they can do.

After a disaster, the CFPB tells people to contact card issuers and other lenders before the next payment is due and explain when they expect to resume normal payments ^[2]. Bank of America says "the earlier you contact us the sooner we can work together to come up with a solution" ^[9]. Capital One's advice is to reach out "as soon as possible" if you can't make the minimum ^[7].

The common triggers are job loss, a medical event and a disaster. For medical debt, the CFPB suggests asking the provider for an interest-free repayment plan and checking whether you're eligible for financial assistance or charity care ^[4]. For a mortgage, call the servicer right away; the CFPB says some servicers only take requests within a set time after a disaster or other event ^[3].

What do credit card hardship programs offer?

Depending on the issuer: a lower payment, a lower interest rate, waived fees or a pause. Bankrate says they usually last a few months to a year.

Citi lists four things a hardship program may let you negotiate: "Pausing payment", "Lowering your interest rate", "Waiving your late fees" and "Reducing your minimum payment" ^[6]. The CFPB says some card companies waive interest and late fees after a disaster, while others let you stretch out or pause payments ^[2].

Issuers often don't advertise these programs, so you usually have to ask ^[10]. Bankrate also warns that interest can keep building during a program and that the account may be frozen for new purchases ^[10]. Our table below shows what four issuers say on their own pages.

Can I ask a mortgage or auto lender for hardship help?

Yes. Mortgage servicers offer forbearance and repayment plans. Forbearance pauses or shrinks payments but doesn't erase or reduce what you owe.

The CFPB defines mortgage forbearance as an arrangement where your servicer lets you "temporarily pause mortgage payments or make smaller payments" ^[3]. You still repay what you skipped. The CFPB says to keep asking until you understand three things ^[3]:

• How much you'll pay, and for how long.
• How interest builds while payments are paused or reduced.
• When and how you'll repay the amount you deferred.

For a car loan, the CFPB suggests calling the lender and asking whether it has a hardship or forbearance program ^[2].

What should a hardship letter include?

Your name and account number, what happened and when, what you've already done about it, what you can pay now, and the exact help you want.

Experian suggests opening with your name, account number and the reason you're writing, then explaining the hardship in plain terms, showing what you've done to manage it, and saying whether you expect to recover ^[1]. It calls the request itself "the most critical component" of the letter ^[1].

Send proof with it. Experian lists unemployment notices, medical bills and proof of income such as pay stubs, W-2s and 1099s ^[1]. Citi says hardship programs usually ask for proof like medical bills or a layoff notice ^[6].

Is there a hardship letter template I can use?

Yes. Fill in the brackets below, cut anything that doesn't apply, and keep it to one page. Mail it with copies of your proof and keep one for yourself.

1. Heading [Your name], [your address], [your phone], [date]. To: [lender name], [hardship or customer assistance department, from the lender's site or your statement]. Re: account ending in [last four digits].
2. Why you're writing I'm writing to ask for help with this account because of a financial hardship. I want to keep paying, and I'm asking for terms I can keep up with.
3. What happened On [date], [what happened, e.g. I was laid off from my job at ___ / I had surgery and missed ___ weeks of work / my home was damaged in the ___ flood]. My monthly take-home pay went from $[amount] to $[amount].
4. What you've already done Since then I've [cut my monthly spending by $___ / applied for unemployment benefits / started a new job on ___]. I've paid $[amount] on this account since [date].
5. What you can pay Right now I can pay $[amount] a month on this account. I expect that to [go back to normal by ___ / stay the same until ___].
6. What you're asking for I'm asking for [a lower minimum payment of $___ / a lower interest rate / waived late fees / a pause in payments / a new due date of the ___th] for [number] months.
7. Proof and sign-off I've enclosed copies of [layoff notice / medical bills / insurance claim / recent pay stubs]. Please send any new terms to me in writing before my first changed payment, and tell me how the account will be reported to the credit bureaus. You can reach me at [phone] or [email]. Sincerely, [signature and printed name].

What should I ask for in a hardship letter?

One change you can actually afford: a lower minimum payment, a lower rate, waived fees, a short pause or a new due date. Ask how long it lasts.

Experian's list of requests includes lowering your payment, pausing payments for a while and settling for less than you owe ^[1]. Capital One says a card company may be able to move your due date ^[7]. Pick the one that matches the payment you wrote down, not the biggest ask you can think of.

Before you agree, Bankrate suggests asking how long the program lasts, whether the account will be frozen, how it affects your credit and what happens when it ends ^[10].

Why should I get a hardship agreement in writing?

So you can show what was agreed if the account is later billed or reported differently. Ask for the terms before you make the first plan payment.

Bankrate notes that an issuer's program will spell out what it offers and how long it lasts, and that you may have to sign a program contract to enroll ^[10]. When you're negotiating a payment plan with a debt collector, the CFPB says to "get the plan and the debt collector's promises in writing before you make a payment" ^[11]. It's fair to ask a lender for the same.

Once a plan starts, check your credit reports. The CFPB says to make sure a skipped payment you arranged isn't reported as delinquent or missed, and to dispute it if it is ^[2]. Our guide to disputing credit report errors has the steps.

Will a hardship plan show on my credit report?

It can. American Express, for one, tells the bureaus when you're in its long-term plan. Ask your lender how it will report your account.

American Express says that in its long-term plan it will tell the bureaus you're in a payment plan, which "will not directly impact your credit score, but will be visible to other lenders" ^[5]. It also says a lower credit limit on enrollment may hurt your score, and that an account already past due may keep being reported past due, though not further past due, if you make the plan payments on time ^[5].

For loan forbearance, Capital One says lenders typically report the account as current or in forbearance if you follow the agreement, but late payments from before it started can still affect your credit ^[8]. Bankrate adds that a program can affect your credit if the issuer closes the account or lowers your limit ^[10]. Late payments already on your report follow the usual timeline, covered in how long negative items stay.