Request Letter for Restructuring of Loan Due to COVID-19

Dear [Bank/Financial Institution Name],

I hope this letter finds you well. I am writing to formally request a restructuring of my existing loan due to the significant financial impact caused by the COVID-19 pandemic. The unprecedented situation has severely affected my income and ability to meet the original terms of the loan, making it challenging to adhere to the current repayment schedule.

Background:
I obtained the loan [Loan Number] from [Bank/Financial Institution Name] on [Date of Loan Approval], with the purpose of [Purpose of the Loan, e.g., buying a home, funding a business, etc.]. At the time of application, my financial situation was stable, and I had every intention of fulfilling my obligations as per the agreed terms. Unfortunately, the COVID-19 pandemic has caused an unexpected disruption in my income stream, making it difficult to maintain regular payments.

Impact of COVID-19:
The COVID-19 pandemic has led to widespread economic challenges, including a significant reduction in business operations, layoffs, and income instability. In my specific case, [Explain how COVID-19 has impacted your financial situation, e.g., job loss, business closure, reduction in income, etc.]. This unforeseen financial hardship has placed me in a position where continuing with the current loan terms is no longer feasible.

Request for Loan Restructuring:
In light of the above circumstances, I kindly request your consideration for restructuring my loan. Specifically, I am requesting the following adjustments to the loan terms:

1. Extension of Loan Tenure: I request an extension of the loan tenure by [Number of Months/Years] to allow for smaller, more manageable monthly payments.
2. Reduction in Interest Rate: A temporary reduction in the interest rate would significantly ease the financial burden during this challenging time.
3. Deferment of Payments: A grace period of [Number of Months] during which no payments are required would provide much-needed relief.
4. Interest-Only Payments: The option to make interest-only payments for a specified period would help in managing cash flow until my financial situation improves.

Supporting Documentation:
I have attached the following documents to support my request:

1. Proof of income reduction (e.g., pay stubs, tax returns, bank statements).
2. Documentation of any job loss or business closure.
3. A detailed personal financial statement.
4. Any other relevant documents that demonstrate the financial impact of COVID-19.

Conclusion:
I fully understand the seriousness of this request and assure you that I am committed to fulfilling my obligations under the restructured terms. I am confident that with these adjustments, I will be able to navigate through this difficult period and resume regular payments as my financial situation stabilizes.

I would appreciate the opportunity to discuss this matter further and explore the available options. Please feel free to contact me at [Your Contact Information] to arrange a meeting or to provide any additional information you may require.

Thank you for your understanding and consideration during these challenging times. I look forward to your positive response.

Sincerely,
[Your Full Name]
[Your Address]
[Your Contact Information]
[Date]

Table: Impact of COVID-19 on Financial Stability

Key Points to Highlight:

• The financial difficulties faced are directly attributed to the economic fallout from the COVID-19 pandemic.
• A well-structured loan adjustment will facilitate continued repayment and avoid default.
• The borrower remains committed to fulfilling their obligations under the new terms.

By restructuring the loan, both the borrower and the lender can benefit from avoiding the consequences of default, ensuring a mutually beneficial outcome during this difficult period.