Letter to the Bank for Prepayment or Foreclosure of a Loan

A loan account holder (borrower) may request his banker (lender) to close his loan account prematurely by making an early payment of the total outstanding amount. Likewise, the borrower may make a substantial part payment prematurely to reduce his loan burden.

Such part or full prepayments are allowed only as per the policy of the bank with respect to the type/scheme of loan taken. Here is an example of a letter to the bank manager requesting foreclosure or prepayment of loan obtained.

TEMPLATE

Date: ________

From

(Name of the Borrower)

(Address)

Mob. _________

Email: ___________

To

The Branch Manager

(Name of the Bank)

(Name of the Branch)

(Bank Address)

Sub.: Request for prepayment / pre-closure of loan obtained

Ref: Loan account number ___________

Dear Sir/Madam,

I beg to state that I have availed a home/car/personal loan from your bank under loan account no. ________. The said loan was obtained under the ________ scheme of the bank. I would like to make part/full prepayment of the loan from the amount outstanding.

I am aware that prepayment / pre-closure of the loan account is subject to certain charges as may be applicable as per the policy of the bank for the specific loan type and scheme thereof.

I understand that your bank reserves the right to revise the amount payable if at any time it is found that the sources and documents submitted is/are found to be incorrect and/or inadequate. I undertake to abide by the same.

I confirm that the prepayment/ pre-closure payment is being made from the sources mentioned herewith. Please note the following details of payment enclosed towards prepayment / pre-closure of the said loan:

1. Cheque/ DD/ Ref. No. ________ dated _________.

2. Amount: __________.

3. Bank name and Branch: _____________.

4. Bank account number: ___________.

5. Payer name: _______________________.

6. Source Description with Source Amount Breakup.

7. Details of Bank Statement/ Other Document evidencing source: ___________.

Bank statement for last six months is enclosed herewith for your kind information.

(Write this paragraph only for pre-closure.) Further, if any excess amount is available under my loan account after adjusting all the dues and charges, then you are kindly requested to remit such amount directly to my following bank account: (a) Bank name: _____________, (b) Account number: __________, (c) Type: Savings/Current, (d) IFSC: __________, (e) MICR: _________, and (f) Account-holder name: __________.

Kindly do the needful and oblige.

Thanking you,

Yours faithfully,

   (Signature)

(Name of the Borrower)

Encl.: As above