Loan Foreclosure Letter to Bank for Prepayment
A loan foreclosure letter is a formal notice that borrowers send to their bank or lending institution when they intend to pay off a loan before its scheduled due date. This letter outlines the terms and conditions of the prepayment, acting as an official record of communication between the borrower and the financial institution.
This document is vital as it requests the closure of the loan account. It’s crucial to review the loan terms for any prepayment penalties or fees before writing the letter and to contact the bank to confirm the prepayment process and additional requirements. Taking these steps ensures that the loan foreclosure letter is clear and concise, facilitating a smooth prepayment process.
The letter typically includes a subject line, introduction with borrower and loan details, declaration of intent to prepay with terms, a payment plan, and contact information. Key components encompass the loan and account details, the total amount due, prepayment date, payment method, and a request for confirmation. Clarity and brevity are essential to avoid misunderstandings.
Loan Foreclosure Letter to Bank for Prepayment
Date: [Current Date]
From,
[Your Name]
[Your Address]
Mobile: [Your Mobile Number]
Email: [Your Email]
To,
The Branch Manager
[Bank Name]
[Branch Name]
[Bank Address]
Subject: Request for Prepayment / Pre-Closure of Loan Account Ref: Loan Account Number [Your Loan Account Number]
Dear Sir/Madam,
I am writing to request for the prepayment / pre-closure of my [home/car/personal] loan account with your esteemed bank. My loan account number is [Your Loan Account Number] and I had availed the loan under the [Name of Scheme] scheme of your bank.
I would like to make a partial / full prepayment of the outstanding loan amount. I understand that prepayment / pre-closure of the loan account is subject to certain charges as per the bank’s policy. I hereby confirm that I have read and understood the applicable charges and will abide by them.
Enclosed herewith, please find the details of the payment towards prepayment / pre-closure of my loan account:
- Payment Type: [Cheque/DD/Ref. No.]
- Payment Date: [Payment Date]
- Payment Amount: [Payment Amount]
- Bank Name and Branch: [Bank Name and Branch]
- Bank Account Number: [Bank Account Number]
- Payer Name: [Payer Name]
- Source Description with Source Amount Breakup.
- Details of Bank Statement / Other Document evidencing source: [Details]
[Write this paragraph only if applicable for pre-closure] If there is any excess amount available in my loan account after adjusting all the dues and charges, I request you to kindly remit the excess amount to my following bank account details: (a) Bank Name: [Your Bank Name] (b) Account Number: [Your Account Number] (c) Account Type: [Your Account Type – Savings / Current] (d) IFSC Code: [Your Bank’s IFSC Code] (e) MICR Code: [Your Bank’s MICR Code] (f) Account Holder Name: [Your Account Holder Name]
I hereby confirm that the prepayment / pre-closure payment is being made from the sources mentioned above. I have also enclosed my bank statement for the last six months for your reference.
Thank you for your attention to this matter. Kindly do the needful and oblige.
Yours faithfully,
[Your Signature]
[Your Name]
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