HFC, or Household Finance Company, is a now-defunct lender. The former HFC was a subsidiary of HSBC Bank, a British banking conglomerate. However, HFC is still servicing its open loans. In order to reduce the interest rate on an HFC loan, you'll have to do one of two things; file for a hardship or refinance elsewhere.
Instructions
- 1
Calculate your debt-to-income ratio to determine your eligibility for a hardship loan. In order to qualify, lenders generally want to see that you are currently unable to pay the minimum payments on all expenses. To figure this out, you must do a debt-to-income ratio (DIR) calculation. Divide your total monthly expenses by your gross monthly income. 50 percent is normally the threshold.
2Contact the customer service department at HFC. You must get transferred to the account servicing department. These representatives will be able to complete a hardship application with you. Be prepared to mail, email or fax in your income documents to prove your hardship.
3Draft a hardship letter explaining the reason you need a hardship exception. This can be: disability, unemployment or medical emergency. It's important to be thorough in this letter as the underwriter reviewing the application will look carefully at your reasons.
4Remember that a hardship exception is a temporary plan--you will eventually be put back on the original terms of the loan. You must have a plan B for when that occurs.
5Refinance the HFC debt with another lender for a lower interest rate. You cannot refinance with HFC. Pull a copy of your credit report (see Resources for a free copy) and purchase your FICO score (scores over 720 are excellent; scores below 600 are poor).
6Begin researching lenders for a refinance. No matter the type of debt--mortgage, personal loan, auto loan--banks and credit unions almost always offer the most competitive rates on loan program. You must, however, have good to excellent credit. Otherwise, you should look at finance companies such as CitiFinancial.
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