Reduced Payment Request Letter
If you cannot afford your current repayments, a reduced payment request letter explains your situation to your creditor and proposes an amount you can realistically afford. This is a common and well-understood process.
When to Request Reduced Payments
A reduced payment request is appropriate when:
- Your income has dropped but you still have some ability to pay
- Your expenses have increased significantly
- You have multiple debts and need to spread limited funds
- You are temporarily unable to meet full payments
How to Calculate What You Can Afford
Before writing, use our Budget Calculator to work out:
- 1Total monthly income — wages, benefits, other income
- 2Essential expenses — rent, council tax, energy, food, transport
- 3Available amount — what is left after essentials
- 4Pro-rata split — divide the available amount between creditors based on what you owe each
What to Include
- Your account details
- Your current payment amount and what you are proposing instead
- A brief explanation of your circumstances
- An income and expenditure summary (optional but helpful)
- A request for interest and charges to be frozen alongside reduced payments
Your Rights
- Creditors cannot harass or threaten you
- They must give reasonable consideration to your proposal
- If you are following a debt management plan, creditors should cooperate
- You can complain to the Financial Ombudsman if treated unfairly
Frequently Asked Questions
What is a pro-rata payment?
A pro-rata payment divides your available money between creditors based on the proportion of each debt. For example, if you owe £5,000 to one creditor and £2,500 to another, the first would receive twice as much of your available payment.
Can my creditor refuse reduced payments?
A creditor can technically refuse, but FCA rules require them to show forbearance to customers in financial difficulty. If they refuse a reasonable proposal, this may be grounds for a complaint.
Should I stop paying if I can't afford the full amount?
It is generally better to pay what you can and communicate clearly with your creditor. Paying a reduced amount with communication is viewed more favourably than simply stopping payments.
Related Guides
Request to Freeze Interest and Charges
Free template to request an interest and charges freeze from your creditor. Stop debt growing while you make reduced payments during financial difficulty.
Hardship Letter for Credit Card Debt
Free hardship letter template for credit card debt. Generate a professional letter requesting reduced payments, interest freeze, or a payment plan from your credit card provider.
Sources & Further Reading
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