Loan Closure Letter │ How to Write, Format and Sample Letters for You

Almost every grown up working individual today has a history of paying educational loans, house loans, car loans, property loans and so on. Loans are meant to help people by providing them with a considerable amount of cash when required with the condition that they pay it on a monthly or yearly basis. This varies according to the type of loan and the terms and conditions of the particular loan. You can learn more about how to apply for a loan and close a loan by reading this article. Also, learn how to write a loan closure letter by going through the sample loan closure letters.

• How to Apply for a Loan?
• Closing a Loan
• Sample Loan Closure Letters
  • Personal Loan Closure Letter Format
  • Home Loan Closure Letter Sample
  • Car Loan Closure Letter Format
• Frequently Asked Questions on Loan Closure Letter

How to Apply for a Loan?

If you are thinking of applying for a loan, there are a few things you should know before you approach a particular bank with your loan application. There are different types of loans like personal loans, house loans, car loans, educational loans, etc. Personal loans can be used for various purposes, including weddings, travel purposes, renovations and so on.

In order to apply for a loan, you have to first find out if you are eligible to do so. The factors you should look into are the following:

• Your age is one of the most fundamental requirements. Only people above the age of 18 are usually considered eligible to apply for a loan.
• Your housing situation plays a vital role in the approval of your loan. Having your own house will for sure be an added advantage as it is easier to avail a loan in this scenario than a rented house.
• Your existing credit is another important factor. If you have already applied for another loan, the chance of getting a loan is low as it is necessary that the loan applicant possesses the required credit amount. You should be able to show proof that you have a stable job or a permanent income that supports you and would help you pay back the loan.
• You also need to have a good track record of credit that proves your ability to pay back the loan.

Closing a Loan

If you remember, the loan officer or the bank officials would have mentioned the terms and conditions of the loan. This includes the time period in which you have to pay back your loan, foreclosure fee, a lien on the property you are taking a loan for, etc. For vehicle loans and personal loans, there might be a prepayment penalty of 1% to 5% of the outstanding balance before the pre-closure. Make sure you obtain a No Objection Certificate, which certifies that you do not have any pending payment dues. Do not forget to collect all the original documents that you had submitted when you applied for the loan.

You can follow the format of a formal letter when writing a loan closure letter. Make sure you provide your complete details along with the supporting documents. Provide your contact details so that they can contact you in case they have any questions or clarifications to be made.

Sample Loan Closure Letters

If you are looking for sample loan closure letters, you have come to the right place. Check out the following loan closure letter samples to understand the format well so that you can write your own letter without a doubt.

Personal Loan Closure Letter Format

21/56, N B C Layout 2^nd Street

G N Mills

Mettupalayam Road

Coimbatore – 641012

January 15, 2022

The Branch Manager

State Bank of India

G N Mills Main Branch

Mettupalayam Road

Coimbatore – 641012

Subject: Request for loan closure

Dear Sir/Ma’am,

I am Sudharshana Karthik, and I have a personal loan in my account in your bank. I am writing this letter to request you to close my personal loan account with the number 1526xxxxx4656.

I have paid all my EMIs, and the loan tenure is complete. I am attaching herewith all the mentioned documents, including the No Objection Certificate, Payment Receipts, Loan Sanction Documents, a copy of my Aadhaar Card and PAN Card as per the requirements of the bank. Kindly do the needful and let me know the further procedure of the closure of my personal loan. Please feel free to contact me in case of any queries.

Thank you for your support and cooperation.

Yours sincerely,

Signature of the sender

SUDHARSHANA KARTHIK

Contact details:

Phone number : 123445

Email id : name.name@email.com

Attached documents

1. No Objection Certificate

2. Payment Receipts

3. Loan Sanction Documents

4. Copy of Aadhaar Card

5. Copy of PAN Card

Home Loan Closure Letter Sample

Apartment No. 142, Green Hill Apartments

Lakshmi Nagar 4^th Street

Tambaram West

Chennai – 600054

January 24, 2022

The Branch Manager

Central Bank of India

Tambaram West Branch

Chennai – 600054

Subject: Request for home loan closure

Dear Sir/Ma’am,

I am Shahul Hamid. I hold a home loan account in your bank. I would like to bring to your notice that I have completed all the EMI payments in full, so I would like to request you to close my home loan account.

The actual tenure of my home loan with the account number 1623xxxx6536 ends in July. I was told that I would have a minimum of a 3% prepayment penalty as I am closing the loan prior to the completion of the loan tenure. Therefore, I authorise you to debit the said charges from my account.

I am enclosing a copy of my Aadhaar Card, a copy of my PAN Card, Loan Sanction Documents, EMI Payment Receipts and a copy of my bank passbook as informed. I request you to kindly do the needful and close my home loan account as early as possible.

Looking forward to a positive response from your end.

Thanking you

Yours sincerely,

Signature of the sender

SHAHUL HAMID

Car Loan Closure Letter Format

45/156, B B Street

Anna Nagar East

Chennai – 600012

January 27, 2022

The Branch Manager

Union Bank of India

Anna Nagar East Branch

Chennai – 600012

Subject: Request application for car loan closure

Dear Sir/Ma’am,

I am Stan Hudson, and I am writing to request you to close my car loan account with the account number (mention your account number).

I would like to inform you that the tenure of my Car Loan is over, and I have paid all my dues. I have attached all the documents as per the instructions. I request you to kindly close my car loan account and provide me with all the original documents I had submitted when I applied for the loan. Kindly let me know if there is anything else that I have to do as part of the closing procedure.

Thank you

Yours sincerely,

Signature of the sender

STAN HUDSON

Contact information

Phone number: 99999

Email address: name.name@email.com

Attached documents

1. Loan Sanction Letter

2. Copy of Aadhaar Card

3. Copy of PAN Card

4. No Objection Certificate

Check out different types of Letter Writing including Informal Letters, cheque book request letter, enquiry letter, application for bank statement and application for closing bank account