Table of Contents
Loan Closure Letter: In today’s world, taking out a loan is a common practice, especially when managing large expenses. Whether it’s for a home, car, or personal needs, loans help people by providing the necessary funds and allowing repayment in manageable installments. However, once you’ve paid off your loan, you need to formally close it. This is where a loan closure letter comes into play.
What is a Loan Closure Letter?
A loan closure letter is a formal document you send to your lender once you’ve repaid the entire loan amount. It signals that you’ve fulfilled your repayment obligations and wish to close the loan account. This letter is essential for ensuring that you are officially recognized as having paid off the loan.
Why is it Important?
Sending a loan closure letter serves a few important purposes:
- Official Confirmation: It provides formal proof that your loan account is settled.
- No-Due Certificate: After processing your letter, the bank will issue a no-due certificate. This document confirms that you owe nothing more to the lender.
- Record Keeping: It helps maintain clear records for future reference or any potential disputes.
How to Write a Loan Closure Letter
Writing a loan closure letter is straightforward. One can follow below steps:
- Subject Line: Clearly state “Loan Closure Request”.
- Introduction: Mention your loan details, including the loan account number and the date of loan disbursement.
- Request for Closure: State that you have repaid the loan in full and request the closure of the loan account.
- Request for No-Due Certificate: Ask for a no-due certificate as proof of loan settlement.
- Contact Information: Provide your contact information for any follow-up.
Loan Closure Letter Format
Your Name
Your Address
City, State, ZIP Code
Email Address
Phone Number
Date
Bank’s Name
Branch Name
Branch Address
City, State, ZIP Code
Subject: Request for Loan Closure
Dear [Bank’s Name] Loan Officer,
I hope this letter finds you well. I am writing to formally request the closure of my loan account with [Bank’s Name]. The details of my loan are as follows:
Loan Account Number: Your Loan Account Number
Type of Loan: e.g., Home Loan, Personal Loan
Date of Loan Disbursement: Date of Disbursement
Loan Amount: Original Loan Amount
I am pleased to inform you that I have completed all the necessary payments and obligations associated with this loan. Attached to this letter are the documents supporting the closure request, including the final payment receipt and a statement of the account.
Please find below the necessary details for your reference:
Final Payment Amount: Final Payment Amount
Payment Date: Date of Final Payment
I kindly request that you process the closure of my loan account and provide me with the following:
Loan Closure Certificate: An official document confirming the closure of my loan account.
No Dues Certificate: A certificate indicating that no dues are pending on the account.
Updated Account Statement: A final statement of the account reflecting the closure.
Please confirm receipt of this letter and the completion of the closure process at your earliest convenience. If you need any additional information or documents, feel free to reach out to me using the contact details shared earlier.
Thank you for your help with this issue. I value your swift response to my request.
Sincerely,
Your Name
Signature (if sending a hard copy)
Example Letter
Your Name
Your Address
City, State, ZIP Code
Email Address
Phone Number
Date
Bank’s Name
Bank’s Address
City, State, ZIP Code
Subject: Loan Closure Request
Dear Bank’s Name,
I am writing to request the closure of my loan account with reference to Loan Account Number [Your Loan Account Number]. I have successfully repaid the entire loan amount as per the terms of the agreement.
Please issue a no-due certificate confirming that the loan has been fully paid and that there are no outstanding dues. Kindly close the loan account and provide written confirmation at your earliest convenience.
Thank you for your assistance.
Sincerely,
[Your Name]
Loan Closure Letter Samples
Sample 1: Personal Loan Closure Letter
Rikesh Sharma
123 Maple Street
New Delhi, 110001
rikesh.sharma 501@gmail.com.
(555) 123-4567
Date: 23/07/2024
To
HDFC Bank
Connaught Place Branch
HDFC Bank Building, 23rd Floor
Connaught Place, New Delhi, 110001
Subject: Request for Personal Loan Closure
Dear Sir/Madam,
I am writing to inform you that I have successfully repaid the personal loan with loan account number PL123456789. I request you to kindly process the closure of this loan account.
Please find attached the necessary documents confirming the final repayment. I would appreciate it if you could provide a formal loan closure certificate and update your records to reflect that the loan has been fully settled.
Thank you for your quick response to this matter.
Sincerely,
Rikesh Sharma
Sample 2: Home Loan Closure Letter
Jane Smith
789 Oak Avenue
Chicago, IL 60614
jane.smith@example.com
(555) 987-6543
Date: 23/07/2024
To
Chicago Financial Services
Northside Branch
101 Pine Street
Chicago, IL 60611
Subject: Request for Home Loan Closure
Dear Sir/Madam,
I am writing to notify you that I have completed the repayment of my home loan with loan account number HL987654321. I kindly request you to close this loan account and issue a loan closure certificate.
Attached are the final payment receipts and any other required documents. Please update your records and confirm that the loan has been closed.
Thank you for your assistance in this matter.
Sincerely,
Jane Smith
Sample 3: Car Loan Closure Letter
Michael Johnson
456 Birch Road
Naperville, IL 60563
michael.johnson@example.com
(555) 234-5678
Date: 23/07/2024
To
Naperville Auto Bank
Main Branch
202 Cedar Lane
Naperville, IL 60540
Subject: Request for Car Loan Closure
Dear Sir/Madam,
I am writing to confirm that I have repaid the car loan associated with loan account number CL112233445. I would like to request the closure of this loan account.
Enclosed are the documents verifying the final payment. Please provide a formal closure certificate and update your records to show that the loan is fully settled.
Thank you for your cooperation.
Sincerely,
Michael Johnson
Loan Closure Letter by Bank
[Bank’s Letterhead] [Date]Mr. Rajesh Kumar
123 Shankar Babu Lane
New Delhi, 110001
Subject: Confirmation of Loan Closure
Dear Mr. Kumar,
We are pleased to inform you that your loan account with State Bank of India has been successfully closed. Below are the details of your loan account:
Loan Account Number: 9876543210
Type of Loan: Home Loan
Date of Loan Disbursement: 1st June 2019
Final Payment Date: 15th July 2024
Final Amount Paid: ₹5,00,000
This letter serves as an official confirmation that all dues pertaining to your loan account have been cleared. Attached to this letter, you will find the following documents:
Loan Closure Certificate: An official statement indicating the closure of your loan account.
No Dues Certificate: A certificate confirming that no outstanding amounts remain.
We appreciate your prompt payments and cooperation throughout the tenure of your loan. Should you require any further assistance or have any queries, please feel free to contact us.
Thank you for choosing State Bank of India.
Sincerely,
Ms. Priya Sharma
Branch Manager
State Bank of India
Connaught Place Branch
New Delhi, 110001
Phone: 011-23456789
Email: priya.sharma@sbi.co.in
Loan Closure Letter FAQs
How do I write a letter of closure for a loan?
To write a loan closure letter, include your loan account details, state that you have completed the payments, and request for a loan closure certificate and no dues certificate. Attach any necessary documentation, such as the final payment receipt. Address the letter to your bank's loan officer and include your contact information.
What is a loan closure certificate?
A loan closure certificate is an official statement from the bank that confirms a loan has been completely paid off and the account is officially closed. It serves as proof that there are no remaining balances and that the borrower has met all the required obligations.
How to do loan closure?
To close a loan, make the final payment, request a loan closure letter from your bank, and ensure all dues are settled. Obtain a loan closure certificate and a no dues certificate from the bank to confirm the account has been closed and is clear of any remaining balance.
How to conclude a loan application letter?
Conclude a loan application letter by expressing your gratitude for considering your request, summarizing the key details of your application, and stating your readiness to provide additional information if needed. Sign off with a formal closing, such as Sincerely, followed by your name.
