40+ Sample Financial Hardship Letter Templates

What Is a Financial Hardship Letter?

When you are experiencing financial hardships, a financial hardship letter can help you explain why you could not pay your financial obligations on time or as regular as you used to. This kind of letter is usually submitted by people who cannot pay their mortgage and credit card bills before or on its due date. With this letter, they can request leniency and can prevent the possibility of any foreclosure. The use of this letter can also help people deal with medical bills, child support for single mothers, and student loans. Other circumstances that put an individual in a financial hardship include the sudden death of a loved one, unexpected job loss, pay reduction, and so on.

While it is not a guarantee that your lenders will give you special consideration, they will surely acknowledge sending one as an act of courtesy. But in the event that it is considered, adjustments such as reducing your payments, allowing debt settlement, or modifying your loan will be granted. Apart from explaining why you are struggling financially, this kind of letter can help you in proving yourself that you have the ability to sort things out which can also help you to convince your lenders to agree upon your request.


Purpose of a Financial Hardship Letter

To write an effective financial hardship letter, it is crucial that you know your purpose for writing one in the first place. With purpose in mind, you can easily determine the appropriate terms and content that you need to use in your hardship letter. You can make various appeals, such as the temporary suspension of your previous amount dues, interest rate adjustments, loan modification, debt settlement, or the short sale your house. There are more options to explore so consider seeing advice from a finance expert to help you in determining the best one that fits your situation.

How to Compose a Financial Hardship Letter

The contents of a financial hardship letter depend on your current financial standing as well as your capacity to resolve any possible financial struggles in the future. If you want to compose an effective financial hardship letter, there are some procedures that you need to follow.

Step 1: Download a Ready-made Financial Hardship Letter Template

If this is your first time writing a financial hardship letter, creating its structure might be tricky for you. However, if you download a ready-made financial hardship letter temple, you will have a guide as you write your hardship letter. Most letter templates already contain ready-made content; however, its details may not apply to your situation. That is why it is essential that you also customize its contents and retain only the format that you want to follow. You may also use its ready-made content as your guide on how to structure your letter composition.

Step 2: Know What You Want to Request

Before you sit down and write your letter, you need to know first what you want to request from your creditor or lender. Depending on your financial situation, there are various requests you can ask from your lender through a financial hardship letter. Such requests include suspending your past or even present amount dues, lowering the initial interest rate set, decreasing your due payment, modifying your loan, or allowing debt settlements. Consider including some details that explain how your financial struggles escalated and what changed in your financial situation because of it. Do not forget to also keep in mind the things you have done to mitigate your situation since you will need to write brief details about it later on.

Step 3: Start with the Introductory Paragraph

To start writing for the body of your letter, start by directly specifying your reasons for writing a letter to them in your first or introductory paragraph. Avoid making unnecessary narratives that will not help you convince or persuade your recipient in considering your situation. By being direct to the point, you can immediately express your intended purpose for writing. After doing so, you can already state what you want to request from your creditor or lender.

Step 4: Provide More Details Through the Supporting Paragraph

To inform the recipient of your letter regarding the underlying reasons for your request, you need to explain why so your lender can fully grasp your difficult situation. Explain how your financial struggles came about, what you did to alleviate its effects, and how your current financial situation requires extensive measures to improve it somehow. It is also in the supporting paragraph where you have to indicate the solution you have come up with that can help you in alleviating your current financial struggles. And, of course, you need to explain why the solution you came up with can help you in your financial struggles.

Step 5: End with the Concluding Paragraph

To end your letter, don’t forget to thank your recipient for taking the time to read your letter. In this paragraph, express that you want to get feedback from them soon. Don’t forget to reiterate that you will pay regularly. Add your contact details so that your lender can quickly get in touch with you once they have already come up with a decision. If you have stated that you have documents to prove your financial hardships, then indicate it in your financial hardship letter that you have enclosed such documents. Summarize your purpose, and you can finally end your letter with the closing remark and your full name and signature.

Step 6: Proofread and Finalize Your Financial Hardship Letter

Before printing your letter and handing it to your lender, ensure that you have proofread and finalized every single thing you included in your financial hardship letter. Consider taking advice from a financial coach to ensure that the contents of your hardship letter are sufficient enough to help you out with your current financial struggles. After making sure that your letter successfully addressed all the points you want to get across, then you may already print your letter and send it to your creditor.

Dos and Don’ts of a Financial Hardship Letter

If you have already reached the end of the road and you still can’t see any way you can improve your financial situation, a financial hardship letter should help you explain your situation to your creditors and lenders. However, you must compose this kind of letter with extra care since one wrong move can be a factor that your request won’t be granted. That said, consider taking notes of some of our dos and don’t that should serve as your guide as you construct your financial hardship letter.

1. Do keep it as brief and direct to the point as possible.

Like any business letter, you must construct sentences that directly express your main point. As much as possible, do not write a hardship letter for more than a page. If you keep your letter long enough, you will not only fail to make your point across to the recipient of your letter, but you will also lose the chance of getting your request granted.

2. Do give relevant information regarding your situation.

Explaining alone won’t be convincing enough for your lender. You need to provide some documents that can prove that you are indeed experiencing financial hardships. Such materials include bank statements, invoices, cash flow statements, pay stubs, tax returns, and so on. Whatever documents you have, make sure it’s enough to back up your claims that you are indeed struggling financially.

3. Do keep your goals in mind.

Writing a financial hardship letter can get tricky, especially if you have not kept your objectives in mind while doing so. If you want to persuade your lender to help you resolve your current financial struggles, then be sure to write with purpose. Make it known that your lender’s assistance will be the only thing that can help you out at the moment until you can land back on your feet again.

4. Do know your lender’s qualified hardships.

Before writing your letter, you must know the types of hardships they only acknowledge. If your letter states that you are struggling to pay the amount due because you are currently paying the car you recently bought, then don’t even hope that your request for a loan modification or debt settlement will be granted. Your lender will think twice about your appeal because if you can afford a car, then shouldn’t you be able to afford to pay for your debts?

5. Do specify your action plan to your lender.

You need to accurately specify the remedy that can help you alleviate your financial hardships. It is also in doing so that you will make this easier at the end of your creditors. They will also be encouraged to help you out since you are doing less work for them for already determining by yourself the ways on how you can resolve your financial struggles. Most especially, it is crucial to make it clear to them that the action plan you have come up with is a crucial action that can help you out in saving what you have loaned from them.


1. Don’t beat around the bush―go directly to the point.

In composing a hardship letter, you don’t have to build suspense before you get to the point. You are not writing a novel; you are constructing a hardship letter that will help you face your financial obligations. Beating around the bush won’t help you in getting your request. Do not bother including lengthy and irrelevant narratives that will only fill up the entire page of your letter when the gist of what you intend to say is that you want to request a loan modification or a debt settlement.

2. Don’t forget your goals for writing a hardship letter.

Get straight to the point. It is advised that you should never forget your goals for writing in the first place. In doing so, you can retrace back your steps once you think that you are already rambling in writing the draft of your letter. With your goals in mind, your letter will have a smooth flow and a clear direction, which makes it possible for you creditor or lender your purpose for writing them a hardship letter.

3. Don’t play the blame game.

Blaming your creditor will not be helpful to your current situation. That is why you should never resort to playing the blame game when writing your letter of financial hardship won’t be of help. Don’t even think of giving your lender an ultimatum such as filing for bankruptcy in case your request for a loan modification or debt settlement won’t be granted.

4. Do not use made-up an invalid or false financial hardship.

If you are planning to come up with an invalid hardship, do not even bother because your lender will eventually find out about it. Also, they might have a list of qualifying hardships and your made-up excuse will not be considered as valid that often include medical ailments or sudden job loss. This only means that if the hardship you will state in your letter does not fall under their qualifications, your creditor will not honor the reason you stated in your letter.

5. Do not forget providing your creditor a plan.

Other than informing that you are currently experiencing financial hardships, you also need to discuss to the lender of your plans on how you can pay once they allow any adjustments. You also need to assure your creditor that your financial state will be better soon and that what your financial struggles right now are only temporary.

6. Don’t make the letter to vent out your frustrations.

Sure, it is understandable that financial hardships are undeniably frustrating. However, don’t take out your anger toward your lender because they have nothing to do with it except granting your request. And if you want your letter to be honored, then see to it that you will write an appropriate letter that will constitute your expected outcome.

7. Don’t promise anything you can hardly commit.

Even if you need to assure your creditor that your financial situation will improve soon, be sure not to promise anything that you can’t commit. Don’t make any exaggerated promises that you cannot fulfill just because you want to sound persuasive to your lender. If you promise that you can easily get back on your feet soon, your lender might think twice about proceeding because they will only approve requests from those who have hardships that don’t seem to get resolved soon. They will take your word that you will be financially stable anytime soon and won’t see any reason why your request to adjust the interest rate should be granted.

Arriving at a decision where you think you need to hand in a financial hardship letter is nothing to be hesitant about. Sending one can help you prove that, if weren’t for your financial hardship, you will be able to pay as you regularly do. Writing one as your last resort may be the financial support you need for the meantime. Consider downloading and customizing the financial hardship letter samples provided within this article. Who knows? Your creditor or lenders might go easy on you and give you their kind consideration.