Loan Closure Letter

The Loan Closure Letter is a document used to formally request the closure of a loan-bearing account. It is important because it serves as a written record of the borrower's intention to close the loan account and provides necessary information to the lender. The letter begins with a salutation addressing the recipient as 'Dear Sir/Madam' and states the purpose of the letter, which is to request the closure of the loan-bearing account. The borrower should mention the account number associated with the loan to ensure accurate identification.

 

The letter should provide a brief explanation for the closure of the loan account. This could include reasons such as the loan being fully repaid, refinancing with another lender, or any other relevant circumstances. The borrower should express gratitude towards the lender for their services and cooperation throughout the loan tenure.

 

In the body of the letter, the borrower should mention that all the required documents for loan closure are enclosed with the letter. These documents may include the loan sanction letter, relevant Know Your Customer (KYC) documents, and any other supporting documents as required by the lender. The borrower should ensure that all the necessary documents are enclosed to facilitate a smooth closure process.

 

The borrower should explicitly give permission to the lender to deduct any loan closure charges that may be applicable. This ensures that the borrower is aware of and agrees to any charges that may be incurred during the closure process. The borrower should also express their willingness to cooperate with the lender in completing any additional formalities or paperwork required for the closure.

 

The letter should end with a closing statement, such as 'Thank you' or 'Yours faithfully,' followed by the account sign block, which includes the account holder's first name and last name. This provides a formal and personal touch to the letter, making it more professional and credible.

 

Overall, the Loan Closure Letter is an important document that formally requests the closure of a loan-bearing account. It provides a detailed introduction to the purpose of the letter, mentions the enclosed documents, gives permission for deduction of closure charges, and expresses gratitude and willingness to cooperate with the lender.

How to use this document?

1. Begin the letter with a salutation addressing the recipient as 'Dear Sir/Madam'.

2. Clearly state the purpose of the letter, which is to request the closure of the loan-bearing account.

3. Mention the account number associated with the loan to ensure accurate identification.

4. Provide a brief explanation for the closure of the loan account, mentioning reasons such as full repayment or refinancing.

5. Express gratitude towards the lender for their services and cooperation throughout the loan tenure.

6. Mention that all the required documents for loan closure are enclosed with the letter, including the loan sanction letter and relevant KYC documents.

7. Explicitly give permission to the lender to deduct any loan closure charges that may be applicable.

8. Express willingness to cooperate with the lender in completing any additional formalities or paperwork required for the closure.

9. End the letter with a closing statement, such as 'Thank you' or 'Yours faithfully'.

10. Include the account sign block, which includes the account holder's first name and last name, to provide a formal and personal touch to the letter.