What is a personal loan hardship program?

What hardship programs typically offer: Payment deferral: one or more monthly payments are postponed and added to the end of your loan term. The interest that would have accrued during the deferred period is typically added to the loan balance. Reduced payment plans: temporary lower payment amounts for 3-6 months. When the hardship period ends, payments return to normal (or the loan is re-amortized to incorporate any missed amounts). Interest rate reduction: less common, but some lenders temporarily reduce the interest rate during a hardship period. Waived late fees: most lenders waive late fees when a hardship arrangement is in place.

Lenders with known hardship programs: SoFi: offers unemployment protection that pauses payments for 3 months at a time (up to 12 months total) if you lose your job through no fault of your own. LendingClub: has a hardship assistance program but terms vary. LightStream: case-by-case hardship consideration. Avant: hardship payment adjustments available by phone. Most lenders have some form of hardship assistance, but it is not always advertised - you must call and ask.

How to request hardship assistance: Call the lender before missing a payment. Being proactive (calling before you default) is critical. Lenders are far more willing to help borrowers who are forthcoming about difficulties before the payment is missed. Explain the situation: job loss, medical emergency, natural disaster, divorce. Ask specifically: 'Do you have a hardship program or payment deferral option?' Get any agreement in writing before assuming it is in effect.

Impact on credit score: A hardship deferral, when properly arranged with the lender, should not be reported as a late or missed payment to credit bureaus. The CARES Act established temporary protections during COVID; post-pandemic, protections depend on individual lender policies.