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Request letter for Loan Settlement | Bank loan settlement application and format

Learn writing a request letter for full and final settlement of bank's loan?


If you have taken a loan and you are genuinely unable to pay EMIs due to job loss, illness, injury or some other reason. In this case, you inform the bank about your situation and request them to give some time off and a possible discount in interest amount.

If the bank is convinced that your reason for non-payment is genuine, they may give you a one-time settlement option. Here you take upto 6 month non-repayment period and then, settle the loan in one payment. This process is called 'Loan Settlement'.

Loan Closure Certificate from Bank: It is a No Dues Certificate (legal document) provided by the banks which states that 'the loan has been settled and their is no outstanding to be paid by the borrower as on a specific date'. In case of a vehicle loan, finance company issues a RTO form 35 with an NOC.


Samples of request letter to bank manager for full and final settlement of Loan:

  1. Request for one time settlement of loan.
  2. Request for settlement of an educational loan.


#Sample 1. Request letter for Loan Settlement to Bank:

To,

Branch manager,

State Bank of India,

West Gandhi Maidan,

Patna, Bihar.

Subject: Request for settlement of my loan.

Dear Sir / Madam,

I am the holder of Savings/Current Account, A/C No..... (Account Number) in your bank. I was granted a personal loan / business loan / vehicle loan of Rs 10,00,000 by your bank and the repayment period is 5 years and interest rate is 13 percent per annually.

I have to say with great regret that due to an accident I am now unable to do a job / business (write your related problem here). For this reason I am unable to repay the outstanding loan amount in full with interest. I can only pay the principal amount.

Therefore, you are requested to please forgive the interest or provide a possible discount in view of my pathetic condition. I hope you will accept my request and provide a chance to settle the debt.

I am attaching the copies of Passbook and last EMI deposit receipt with this application for reference.

Thanking you.


Yours Sincerely,

Name...

Add...

Email...

Contact no ...

Date...

letter for one time settlement of loan



#Sample 2. Application for settlement of an educational loan:

To,

Branch manager,

Canara Bank,

Ahmedabad, Gujarat.

Subject: Reg. my unability to pay EMIs of educational loan.

Respected Sir / Madam,

I am currently having Loan Account, A/C No..... (Account Number) in your bank. I had taken an educational loan for admission for .......... course in .......... ........... Institute during session ........ to ........ (Session year).

After completion of the course, I started working in an organisation was employed there for around ...... months. But that job didn't last long after the completion of office project. I have been looking for another job but have not been able to get one as of now. Due to financial crisis I am not able to repay loan installment for the last 3 months.

Some of your loan recovery agent following up with me, and have also visited my home for demanding payment. It is putting lots of pressure on me in addition to my worries of having no job.

Therefore, you are requested to please provide a possible discount in view of my pathetic condition. I am willing to opt for one time settlement in order to close the loan account. I can make the all dues in one payment by ......... (Date). Even though it will be very hard in arranging this money, I am still willing to do it.

I am attaching the copies of Passbook and last EMI deposit receipt with this application for reference.

Thanking you.


Your sincerely,

Name...

Add...

Email...

Contact no...

Date...

Letter for settlement of an educational loan


Note:

  1. 'Loan Account Number' and 'Bank Account Number' both is different terms.
  2. You can modify the contents of these letters as per your requirement.


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Related Information:

Loan closure letter format sample (Application for NOC from Bank)

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