Financial Hardship Letter - How to Overcome Problems in Loan Re-Payment?
Financial Hardship Letter - How to Overcome Problems in Loan Re-Payment
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Not having two meals a day, unable to meet the expenses for water, electricity and other necessary household expenses are some of the basic examples under which one can request for financial assistance. Student loans can be deferred due to financial hardship. One could approach loan providing agencies and request for financial aid to get through the situation. Financial hardship allows people to claim extra benefits towards food and rental expenses.
One of the main reasons for loan modification is delinquency of payment. In order to qualify for the modification, one must have enough documents ( if possible) to prove that one is facing financial hardship. If one decides to get the financial help, the letter should be supported by writing a hardship letter explaining the reason for loan request and describing the circumstances that caused the hardship and providing in detail the financial status along with the monthly expenses incurred during the month.
In some cases it may be difficult to get loan modifications especially after income has been depleted or is non- existent. People can opt for modification if they have been unable to pay off the loan as per the earlier agreement. Before beginning the hardship letter, sufficient research has to be done on loan modification. While opting for changes, the lender will ask for a hardship letter which can be designed to explain the reasons for inability to pay the loan. A hardship letter is necessary in requesting a loan-modification after which the lender or the finance and lending institutions will analyze and study the case thoroughly to determine if one qualifies for a modification of loan.
A hardship letter is essential in requesting a mortgage loan modification. The lenders or financial institutions analyze and review the financial hardship to determine if one qualifies for a modification of the loan. In the hardship letter the following guides should be followed.
a. Mortgage onset date
b. if the home belongs to the individual owner
c. if the home is occupied
d. if the home has primary residence
e. if the financial institution or the lender has an agreement with treasury
The hardship letter should have the necessary information about the financial lending institution that needs to approve the request for the loan modification. This should include mortgage expense of total amount, type of mortgage, date of mortgage entered into, monthly gross household income, property value and loan payment status. Any information such as mortgage address, loan and contact information to make it facilitate the modification.
In the hardship letter, hardship including financial implications, date of onset and estimated duration in the loan modification letter should be explained in detail. Other than these, monthly mortgage expenses including principle, interest, taxes and other deductions to be elaborated.
Lastly, a hardship letter should end with a gross monthly statement, utility bill and tax statement to make it easier for processing the request for loan-modification.
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By: Erie Capipe
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