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Personal Loan Forgiveness Letter Sample [2024]: Ultimate Guide for Borrowers

Here you will find a personal loan forgiveness letter sample.

A personal loan forgiveness letter is a written request to a lender asking them to consider forgiving some or all of your outstanding debt.

This letter is usually written when you are experiencing financial hardship and are unable to make the loan payments as agreed upon in the loan agreement.

The letter should explain your situation and provide evidence of your inability to repay the loan.

If the lender approves the forgiveness request, they may cancel some or all of the remaining loan balance, relieving you of the obligation to repay the forgiven amount.

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If you’ve found yourself in a situation where you’re struggling to repay a personal loan, you’re not alone.

In fact, Personal loan debt makes up 1.3% of outstanding consumer debt.

Many people have found themselves in similar situations due to unexpected financial setbacks, such as job loss, medical bills, or other unexpected expenses.

The good news is that you may be able to get your personal loan forgiven with a well-written personal loan forgiveness letter.

Here I will guide you through the process of writing a personal loan forgiveness letter and provide you with a sample letter that you can use as a reference.

Let’s get started

Read also:

Understanding Personal Loan Forgiveness

Before we dive into the details of writing a personal loan forgiveness letter, let’s first understand what personal loan forgiveness is.

Personal loan forgiveness is a program that allows borrowers to have their outstanding loan balances forgiven or discharged.

This program is usually available for borrowers who are experiencing financial hardship, such as a job loss or a medical emergency, and are unable to make their loan payments.

Let me share with you a few examples of personal loan forgiveness program

  1. Public Service Loan Forgiveness (PSLF): This program is available if you work in certain public service jobs, such as government or non-profit organizations. If you make 120 qualifying payments while working in a qualifying public service job, the remaining loan balance may be forgiven.
  2. Income-Driven Repayment Plans: These plans allow you to make loan payments based on your income and family size. If you make payments for a set number of years, typically 20 to 25 years, the remaining loan balance may be forgiven.
  3. Teacher Loan Forgiveness: This program is available to teachers who work in certain low-income schools or educational service agencies. If you meet certain eligibility requirements and make qualifying payments, a portion of the loan balance may be forgiven.
  4. Closed School Discharge: This program is available to borrowers whose school closes while they are enrolled or soon after they withdraw. If you meet certain eligibility requirements, the remaining loan balance may be forgiven.
  5. Total and Permanent Disability Discharge: This program is available to borrowers who are totally and permanently disabled. If you meet certain eligibility requirements, the remaining loan balance may be forgiven.
  6. etc.

I think those five examples are enough to show you how these loan forgiveness programs work.

Let’s see if you are eligible

Eligibility Criteria for Personal Loan Forgiveness

From my experience, not everyone can get personal loan forgiveness.

Eligibility criteria for this program vary from lender to lender.

To qualify for loan forgiveness, you must meet certain criteria set by your lender, which may include:

  • You must have experienced a significant financial hardship
  • You must have a certain amount of outstanding loan balance
  • You must have made a certain number of payments on the loan
  • You must have demonstrated a good faith effort to repay the loan

Before you apply for personal loan forgiveness, I advise you to review your lender’s eligibility criteria to determine whether you qualify or not.

Now you have found that you are eligible.

Here is how you can write an effective letter to ask for your personal loan forgiveness.

Steps to Writing an Effective Personal Loan Forgiveness Letter

Step 1: Be Clear and Concise

Your letter should be brief, concise, and to the point.

Begin by stating the purpose of the letter, which is to request forgiveness of your personal loan.

Include your name, address, and loan account number to help the lender identify your account.

Step 2: Explain the Situation

Explain why you are unable to make your loan payments.

Be honest and provide as much detail as possible about your financial situation.

If you lost your job or experienced a medical emergency, for example, be sure to mention it.

Step 3: Request Forgiveness

Ask the lender to forgive some or all of your loan balance.

Be specific about the amount you are requesting and why you are requesting it.

Explain how forgiving your loan would help you get back on track financially.

Step 4: Offer a Repayment Plan

If you are unable to obtain complete loan forgiveness, offer a repayment plan that you can afford.

Suggest a new payment schedule that better fits your current financial situation.

This could include lower monthly payments or an extended repayment term.

Step 5: Thank the Lender

End the letter by thanking the lender for their consideration.

Offer to provide any additional information or documentation they may need to make their decision.

Here is how you can structure it

  1. At the top of the letter, include your name, address, and contact information, as well as the name and address of your lender.
  2. In the first paragraph of your letter, introduce yourself and explain why you are writing. Be sure to include your loan account number and the amount of outstanding loan balance.
  3. In the second paragraph, explain the reason why you are requesting personal loan forgiveness. Provide details about your financial hardship and how it has affected your ability to make your loan payments.
  4. In the third paragraph, make a formal request for personal loan forgiveness. Be specific about the amount of loan forgiveness that you are requesting and why you believe that you deserve it.
  5. In the fourth paragraph, provide any supporting documentation that demonstrates your financial hardship. This may include medical bills, proof of job loss, or any other relevant documents.
  6. In the final paragraph, thank your lender for considering your request and provide your contact information in case they need to reach you for additional information.

Personal Loan Forgiveness Letter Sample

The following is a sample personal loan forgiveness letter due to financial hardship

[Your Name]
[Your Address]
[Your City, State, Zip Code]
[Your Phone Number]
[Your Email Address]


[Lender Name]
[Lender Address]
[Lender City, State, Zip Code]

Dear [recipient’s last name]

I am writing to request personal loan forgiveness for my outstanding loan balance of [Loan Balance]. Due to a recent job loss, I have experienced significant financial hardship, and I am unable to make my loan payments.

I am requesting [Loan Forgiveness Amount] in loan forgiveness, which I believe is a fair and reasonable request given my financial situation. I have made every effort to repay my loan, but my financial circumstances have made it impossible for me to do so.

Please find attached [Supporting Documentation], which demonstrates my financial hardship. I hope that you will consider my request for personal loan forgiveness and provide me with the relief that I need to get back on my feet.

Thank you for your time and consideration. Please do not hesitate to contact me if you need any additional information.


[Your Name]

Personal Loan Forgiveness Letter Sample Pdf

FAQ about Personal Loan Forgiveness Letter

Can a personal loan be forgiven?

It is possible for a personal loan to be forgiven, but it depends on the lender’s policies and your specific circumstances. Generally, loan forgiveness is granted in cases of extreme financial hardship, such as a job loss, disability, or unexpected medical expenses. However, it is important to note that loan forgiveness is not a common practice and lenders are not required to grant it.

How do I get forgiveness for a personal loan?

To get forgiveness for a personal loan, you can start by contacting your lender and explaining your situation. Be prepared to provide documentation of your financial hardship, such as bank statements, tax returns, or medical bills. It is also recommended that you submit a formal loan forgiveness letter that outlines your request and details your circumstances. Your lender may require you to fill out an application or provide additional information before considering your request for loan forgiveness.

What if my personal loan forgiveness letter didn’t work?

If your personal loan forgiveness letter didn’t work, you may want to consider other options, such as negotiating a repayment plan or seeking assistance from a credit counseling agency.

Can I get a personal loan forgiven due to a natural disaster?

In some cases, lenders may offer loan forgiveness or other forms of relief to borrowers affected by natural disasters, such as hurricanes or wildfires. Check with your lender to see if they offer any such programs.

Will my credit score be affected if I request loan forgiveness?

Requesting loan forgiveness in and of itself will not directly affect your credit score. However, if you are unable to make your loan payments and default on the loan, your credit score will be negatively impacted.

How long does it take to hear back from a lender about loan forgiveness?

The timeframe for hearing back from a lender about loan forgiveness can vary depending on the lender and your specific circumstances. It may take several weeks or even months to receive a response. Be sure to stay in communication with your lender and follow up on your request if necessary.

Isack Kimaro
Isack Kimaro

Isack Kimaro, a lawyer, Creative Writer and self-taught SEO expert has been a prominent author of law-related topics since 2017. Through hard work, dedication, and a relentless pursuit of knowledge, Isack has successfully navigated the legal industry by providing valuable and easy-to-understand legal information to 500,000+ individuals of all levels of understanding.