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