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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?

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
Image IconDFAS does not process payments for in-service debts. In-service debt payments or inquiries should be directed to you local finance office.

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:

✓ Your account number. This information can be found on your billing statement or debt letter.
✓ A completed Voluntary Repayment Request (VRA).
✓ A completed Financial Hardship Agreement (FHA).

✓ 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.

Decorative call to action box click to 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?

If you are unable to pay in full, you have the right to establish a monthly installment within 30 days of receipt of your demand (debt) notification letter. DFAS will consider the size of your debt and your ability to pay when processing your request.
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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.

Adobe Acrobat PDF Document Image 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:

AskDFAS submit button, click to submit your packet to request an installment payment.

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.

Decorative call to action box click to make a payment.

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.

Decorative information icon.Continue making monthly payments in the amount identified in your demand (debt) notification letter while the VRA and FHA are being processed. Failure to make payments may result in a delayed/denied request for installment payments or additional expenses that will not be reimbursed.
 

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.*

Decorative image form icon SmartForm: For step-by-step guidance to help complete your Reduced Installment Payment Request, click here.

Adobe Acrobat PDF Document Image 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:

AskDFAS button, click to go to the request an installment payment page.

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.

Decorative call to action box click to make a payment.

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.

Image IconContinue making monthly payments in the amount identified in Option 1 of your demand (debt) notification letter while the VRA and FHA are being processed. Failure to make payments may result in a delayed/denied request for installment payments or additional expenses that will not be reimbursed.



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.

Decorative call to action click to learn more about waivers or remissions.


Return to the Debt and Claims DFAS Homepage
 


Page updated July 7, 2023