Financial Hardship Letter Template, Free Download 2026

I, [Full Name], am writing to respectfully request [loan modification / forbearance / deferment of payments / reduction in monthly obligation / other accommodation] with respect to [Account No. / Loan No. / Agreement dated ____________] (the "Obligation"). I am currently experiencing a genuine and significant financial hardship that has materially impaired my ability to meet the payment obligations as originally scheduled, despite my sincere intent and past history of timely performance. I am committed to fulfilling my financial obligations to the fullest extent possible and am seeking your assistance in reaching a mutually workable arrangement during this period of difficulty.

My current gross monthly income is $[____________], and my total monthly essential expenses, including housing, utilities, food, transportation, and required insurance, amount to $[____________], leaving a monthly net shortfall of $[____________]. As a direct result of this shortfall, I am unable to maintain the currently scheduled payment of $[____________] per month without foregoing essential living expenses. I have made every effort to reduce my expenses and have not incurred any discretionary or non-essential expenditures during this period.

The hardship I am experiencing is the result of the following specific and documented circumstances: (a) [Job loss / Reduction in hours / Business closure]: On [____________], I was [terminated / furloughed / had my hours reduced from [____] to [____] per week] due to [reason], resulting in a loss of $[____________] per month in income. Attached hereto as Exhibit A is a copy of my termination letter / notice of reduced hours / unemployment determination; (b) [Medical emergency / Disability]: On [____________], I [was diagnosed with / suffered from] [condition], requiring [medical treatment / hospitalization / ongoing therapy] at an estimated cost of $[____________] per month not covered by insurance. Documentation is attached as Exhibit B.

I have attached the following supporting documentation to substantiate the hardship described herein: (a) most recent two months of bank statements; (b) most recent pay stubs or, if unemployed, a copy of my unemployment determination; (c) documentation of the hardship event (as described above); (d) a monthly budget summary reflecting all income and expenses; and (e) [any other relevant documentation]. I understand that you may require additional documentation to evaluate my request, and I agree to provide any additional information promptly upon request.

I respectfully propose the following resolution: (a) [Option 1: Temporary reduction of monthly payment to $[____________] for a period of [____] months, after which I will resume full payments; (b) Option 2: Deferral of [____] payments, to be added to the end of the loan/obligation term; (c) Option 3: Loan modification reducing the interest rate to [____]% and extending the term to [____] months, resulting in a new monthly payment of $[____________]]. I believe that [state chosen option] will provide me with sufficient time to [stabilize my financial situation / return to full employment / complete medical recovery] and resume full performance without further modification.

I am acting in good faith and am committed to working cooperatively with you to find a mutually acceptable resolution. I respectfully request that you review this letter and the attached documentation and contact me at [phone] or [email] within [____] days to discuss my request. I appreciate your consideration and understanding during this difficult time. Please be advised that this letter is submitted in connection with a good-faith effort to resolve a financial hardship and is not intended as a repudiation of my obligations under the [Agreement / Loan Documents].