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Defense Finance and Accounting Service Providing payment services for the U.S. Department of Defense

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HomedebtandclaimspaymydebtDebt Repayment OptionsReduced Installment Payment Request

**866-912-6488 **Mon-Fri:7:30 a.m. to 4:00 p.m. ESTContact UsPrivacy Information

askDFAS

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# **Apply For a Reduced Installment Payment**

If you’re out-of-service military or civilian personnel, and you received a debt with DFAS, you can apply for a reduced installment payment to pay off your balance over time.
**On this page:**                        - Do I Qualify for a Reduced Installment Payment?
                        - What Do I Need to Apply for a Reduced Installment Payment?
                        - What Does it Cost?
                        - How Do I Apply for Reduced Installment Payment?

## **Do I Qualify for a Reduced Installment Payment?**

You may be eligible to apply online for a reduced installment payment (including the Voluntary Repayment Agreement (VRA) and Financial Hardship Application (FHA)) online to pay off your balance over time if you can answer ‘YES’ to the following statements:
                          - You are an out-of-service military or civilian personnel.
                          - You received a letter from DFAS with an account number that begins with:                              - IN
                            - DE
                            - KC
                            - CL 

## **What Do I Need to Apply for a Reduced Installment Payment?**

Regardless of your preferred payment option, you’ll need the following items to apply:

✓ A submitted payment in the amount indicated in option #1 of your demand (debt) notification letter. For additional information about submitting payments, visit Make a Payment.

## **What Does it Cost?**

We accept full and partial payments for out-of-service debts, including payments toward an installment agreement. Penalties and interest will continue to grow until you pay the full balance. If you do not pay your debt in full, any unpaid portion will be considered past due after 30 days. Pursuant to 31 U.S.C. § 3717, DFAS may add interest, penalties, and administrative fees to amounts not paid in full within 30 days from the statement of your demand (debt) notification letter.

### **Pay in Full**

Pay the debt in full within 30 days of receipt of your demand (debt) notification letter, with no additional paperwork. Provided your lump sum payment is received within 30 days from the date of your initial demand (debt) notification letter, your account is settled and you will receive a zero-balance/paid-in-full billing statement within 30 days. No future penalties or interest will be added.

### **Reduced Installment Payment**

#### **Interest**

Interest at the current Treasury Department Tax and Loan Rate will accrue on the unpaid principal balance 30 days after the initial demand (debt) notification letter date. The rate of interest will be charged is at the Treasury Tax and Loan Rate https://www.fiscal.treasury.gov/prompt-payment/rates.html.

#### **Administrative Fees**

A $10.00 administrative fee will be assessed on your account for each of the following:
                        - No payments received within 60 days of the initial demand (debt) notification letter date.
                        - Initial referral to the credit bureaus.
                        - Initial referral to a private collection agency.
                        - Initial referral to the Treasury Offset Program.
                        - Any personal check not processed by your bank due to "insufficient funds”.

#### **Penalty Charges**

Penalty charges equal to 6 percent of the unpaid principal balance will begin to accrue on your account if there are no payments received within 121 days of the initial demand (debt) notification date.

## **How Do I Apply for a Reduced Installment Payment?**

Collapse AllExpand All

**Option 1: Installment Payment**

If you agree to the installment repayment amount listed in Option 1 of your demand (debt) letter, you will need to complete, sign, and return the Voluntary Repayment Agreement (VRA) and the Financial Hardship Application (FHA).

Submitting your request is as simple as 1...2...3... just follow the steps below..

### 1. Prepare

Access the VRA and the FHA. *Please note: You may need to right click to download or save the documents to your computer before you are able to fill them out.*

 SmartForm: For step-by-step guidance to help complete your Installment Payment Request, click here.

 PDF: Download and complete your Installment Payment Request in PDF format, click here.

### 2. Apply

Complete and sign the VRA and the FHA. Failure to do so may result in delayed processing. Submit the completed form and other required documentation via AskDFAS.

Submit your Packet to Request an Installment Payment via AskDFAS:After submitting via AskDFAS, a ticket number will be emailed to you for reference and updates. Please keep this ticket number for your reference.

### 3. Make a Payment

Submit a payment in the amount identified in Option 1 of your demand (debt) notification letter.

For additional information about submitting payments, visit Make a Payment.You must submit your first payment in the amount identified in Option 1 of your demand (debt) notification letter along with your VRA/FHA.After submitting the packet, you’ll get a confirmation message. You can print this for your records. Once we’ve processed your request for Installment Payments, you’ll get a notice with our decision. To check your payment status using a CAC enabled computer, visit our Online Debt Payment Status Tool.

**Option 2: Reduced Installment Payment Request**

On case-by-case basis, DFAS will consider a request for reduced payments. If you require a lower payment then the amount listed in Option 1: Installment Payment, you will need to complete, sign, and return the Voluntary Repayment Agreement (VRA) and the Financial Hardship Application (FHA).

Submitting your request is as simple as 1...2...3... just follow the steps below.

### 1. Prepare

Access the VRA and the FHA. *Please note: You may need to right click to download or save the documents to your computer before you are able to fill them out.*

 click here

 PDF: Download and complete your Reduced Installment Payment Request in PDF format, click here.

### 2. Apply

Complete and sign the VRA and the FHA. Failure to do so may result in delayed processing. Submit the completed form and other required documentation via AskDFAS.

How to Submit your Packet to Request an Installment Payment via AskDFAS:After submitting via AskDFAS, a ticket number will be emailed to you for reference and updates. Please keep this ticket number for your reference.

### 3. Make a Payment

Submit a payment in the amount identified in Option 1 of your demand (debt) notification letter.

For additional information about submitting payments, visit Make a Payment. You must submit your first payment in the amount identified in Option 1 along with the VRA/FHA.After submitting the packet, you’ll get a confirmation message. You can print this for your records. Once we’ve processed your Reduced Installment Payment Request, you’ll get a notice with our decision. To check your payment status using a CAC enabled computer, visit our Online Debt Payment Status Tool.

## **Are You Interested in Learning About Debt Waivers or Remission of Your Debt?**

Depending on your circumstance, one of these options might be right for you, for additional information, please visit Learn about Waivers or Remissions.

Return to the Debt and Claims DFAS Homepage 

Page updated July 7, 2023

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