Loan Payoff Request Letter: Format (with Samples)

A Loan Payoff Request Letter is a letter written by a consumer asking for the amount required to pay the balance of a loan off by a certain date. You might want to request the information about the balance due on a loan if you plan to pay the remaining balance on that loan early. This balance is not the same as the balance shown on your most recent statement.

Requesting a payoff amount and date will allow you to obtain specific information you would not otherwise have available.

Why is the Payoff Amount Different than the Balance Shown on My Last Loan Statement?

Your payoff amount will differ from the balance shown on your last loan statement for several reasons. First, you will continue to accrue interest between your most recent payment and the payoff date. Second, you may face a penalty for early loan payoff. Third, your bank may charge a processing fee to prepare the payoff amount or to close the account early.

In all cases, you will save the amount of interest you would ordinarily pay between your payoff date and the last scheduled payment date for the loan. For this reason alone, paying off a loan early makes good financial sense.

Point: If you are having trouble meeting your financial obligations, your creditor may accept a much lower amount to settle your account than you owe. Making arrangements to settle your debts in this way can help you work your way toward financial well-being.

When you have enough money to pay the balance of your car or personal loan, write a loan payoff request letter to request the payoff balance. This letter can also be used to request the payoff amount for your mortgage. However, if you are selling or refinancing your home, your lender or title company will usually write this letter and inform you of the payoff amount.

Another reason you might write a payoff request letter is to ask for proof that you have paid a loan in full and have no further obligation to the lender. You might need this type of payoff request letter to clear a lien for a car you have recently paid off.

Here is what you need to include in your loan payoff request letter:

• Your name
• Your contact information
• Your account number
• Type of loan

Loan Payoff Request Letter (Word Template)

There are several reasons you may want to write a loan payoff request letter. Regardless of your reason, the basic format we have provided can be modified to suit your circumstance. Please feel free to use this format to write your loan payoff request letter.