Writing a Request Letter for Extension of Payment Terms [Free Sample]

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Many people find themselves in a tight financial situation where they may not be able to meet their financial obligations. 

They may need a little time to get back on their feet, so they can continue making the payments that will pay down their debt.

When this happens, people who take a proactive approach to the situation and write a loan extension letter to certain creditors find that they often receive help. 

Most financial institutions and lenders have a process whereby a borrower can request additional time to repay a loan. There may be specific requirements for this that should be stated in the loan agreement. 

Call The Lending Institution

The borrower should call the lending institution to get details about the procedure for requesting a loan extension. The request should be made at the right time, so the next payment can be avoided.

The lending institution may have an online request form or a form that can be downloaded from the website. 

All required forms should be completed and sent with the extension request letter. The form may request the borrower’s name and address, contact information, the account number and the number of payments the borrower wishes to skip.

May Require Reference Letters

The lending institution may require reference letters, information about the borrower’s monthly income and expenses and copies of recent bank statements. These documents will support the borrower’s claim of financial hardship. 

Before writing an extension letter, it is important to decide how long the extension should be. 

If it is too short, the borrower may find that they have not sufficiently resolved their financial problems and end up needing to request another extension. 

If the extension is too long, the lender may think that the person is trying to avoid repaying debt.

The borrower must give a convincing reason for requesting a loan extension. Some of the most common reasons that are considered valid reasons for financial difficulties are:

  • Illness of the borrower or a family member that resulted in unexpected medical expenses
  • Loss of income because of loss or job or a reduction in income
  • Divorce or separation
  • A death in the family or the death of a co-borrower
  • Military service
  • Incarceration
  • Legal expenses
  • Unexpected expenses after a natural disaster

However, this list is not all-inclusive. Each lender has different standards. The letter is the borrower’s chance to give a personal look into his or her financial situation. 

Whatever the hardship, the borrower must provide details that will strengthen his or her case. For example, the letter should inform the lender how the borrower got into financial difficulties and how it was out of his or her control. 

There may be more than one hardship contributing to the difficulties. All hardships should be included in the letter.

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Tips For Extension Request

Here are some tips for writing a good extension request letter that delivers the necessary information for the best results possible:

  • The letter should be concise. Most lenders or loan officers will take about five minutes to read the letter. It should be on one page with no irrelevant details
  •  The borrower should make a specific request. This will tell the lender exactly what the borrower wants. For example, the letter may state that the borrower would like six months during which time they do not need to make loan payments.
  • The body of the letter should clearly state the nature of the financial hardship. It must convince the lender that the borrower has no other means for making payments and should not contain any false information 

The letter should end with a summarization of the purpose of the letter. The borrower should make it clear that he or she plans to repay the loan as soon as their financial situation improves.

Borrower Should Not Complain

The borrower should not complain, whine or imply that the problem is the lender’s fault. Humility goes a long way towards convincing a lender that the borrower is a sincere person who wants to pay his or her debt. 

Below is a sample letter for extension of payment terms. The borrower should make sure it is addressed to the right person. 

They can call the lending institution to find out the name of the recipient. It should be written in formal business-letter style and either included with any required forms or sent by certified mail with a return requested. 

Sample Letter For Extension Of Payment Terms

Your Name
Your Address
City, State, Zip Code
Account Number


Name of Lending Officer or Lender
Name of Bank or Lending Institution if Applicable
Address of Lender
City, State, Zip Code

RE: Request for an extension of loan payments

Dear Name of Loan Officer or Lender:

This letter is a formal request to have a five-month extension on my car loan. I have made payments of $200 per month for the past 18 months, and the loan is for 12 more months.

I have just lost my job and cannot make payments at this time. I need my car to find another job, and hope to do so within five months at the most. I understand that the interest still accrues and intend to pay this debt in full.

I was working as a gardener for the Name of University, when they let go seven gardeners including me. I am a qualified landscape artist and believe I can get another job soon.

I have applied to three local five-star hotels as well as to a landscape architect. I would like to make my last payment on DATE and resume payments on DATE.

Thank you for considering my request for a five-month extension of my car loan. I can be reached at Phone Number or at Email Address. I hope to receive a favorable reply from you soon. I will call to arrange an appointment next week.


Your Signature
Your Printed Name 

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