The best thing about EMIs is that it allows you to pay the loan amount in parts. However, if you have enough amount at the moment then you can pay a lump sum amount instead of EMI. In other words, it is called Foreclosure. Besides, foreclosure allows you to save money on the total loan amount. And to do so, firstly you have to write a foreclosure letter to the body. Therefore, today we will see how to write a foreclosure letter.
How To Write A Foreclosure Letter?
When you write a Forclosure letter to a bank, you have to follow a designated format. In fact, the format of the Foreclosure letter is the same as for instance applying for DD cancellation. You need to write the Foreclosure letter to the branch manager. Also, make sure you state the reason for foreclosure very clear and concise.
Additionally, you have to mention the loan account number, your name, and other details.
For your reference, we have includes a few samples of writing a Foreclosure letter. Hence, refer to and use them while writing a letter to the bank.
Guidelines For Writing a Foreclosure Letter
- Address the letter to the head of the financial institution. For example, if you are writing to the bank, then address the letter to the bank manager.
- Subject must be on point.
- In the body, always mention your name and loan account number.
- If you don’t know the foreclosing procedure, then ask them to guide you.
- In case you have paid the remaining loan amount, then mention the payment details.
- This includes payment mode, amount paid, date, copy of receipt, etc.
- Additionally mention your contact number in the letter.
- finally, conclude the letter with regards or sincerely.
Format Of Writing A Foreclosure Letter
Your address
City – Pincode
Date: dd/mm/yy
To
The Branch Manager
Bank name
Branch address
City – Pincode
Sub: Request for ____ Loan Foreclosure
Dear Sir/Madam,
I XYZ, holding a loan account in your branch with account number 7618xxxxxx0991.
I am currently having a loan of INR xx,xxx for (state the reason). To sum up, I am writing this letter to inform you that I wish to foreclose the loan. Moreover, my loan ID is xxxxx and I opted for (no. of EMIs) EMIs. Therefore, I am willing to pay ______ (Amount)in a single installment and foreclose the loan.
Therefore, please guide me through the process of foreclosing the loan. Thank you in advance.
Yours Sincerely,
(Signature)
XYZ
Contact number – 9111111111
Sample For Writing A Foreclosure Letter
Sample 1- Education loan
56, Aparna Apartment
Sharad Colony,
Pune – 118821
Date: 09/08/2022
To
The Branch Manager
Bank Of Baroda
Sharad Colony
Pune – 118821
Sub: Request for Education Loan Foreclosure
Dear Sir/Madam,
I Anand Talmale, having a savings account in your branch with account number 8311xxxxxx9119. To sum up, I have written this letter to forclose my remaining loan amount.
I am currently having an educational loan of INR 1,00,000 in your branch. Moreover, my loan ID is 881120 and I had converted the loan into 10 EMIs. In fact, I have already forfeited 5 EMIs.
Furthermore, I would like to pay the remaining amount in one go and foreclose the loan.
Hence, I request you to guide me through the process of foreclosing the loan.
In case you need any other information, my contact number is 9128111111. Also, I have attached a copy of my PAN card and address proof for your reference.
Thank you.
Yours Sincerely,
(Signature)
Anand Talmale
Contact number – 9128111111
Email id: anand.kt@gmail.com
Attachments:
- PAN card
- Address proof
Explore More Sample Letters
- Leave Letter
- Letter to Uncle Thanking him for Birthday Gift
- Joining Letter After Leave
- Invitation Letter for Chief Guest
- Letter to Editor Format
- Consent Letter
- Complaint Letter Format
- Authorization Letter
- Application for Bank Statement
- Apology Letter Format
- Paternity Leave Application
- Salary Increment Letter
- Permission Letter Format
- Enquiry Letter
- Cheque Book Request Letter
- Application For Character Certificate
- Name Change Request Letter Sample
- Internship Request Letter
- Application For Migration Certificate
- NOC Application Format
- Application For ATM Card
- DD Cancellation Letter
Sample 2- Home loan
If you have a joint account for home loan, you can consider this format for home loan foreclosure letter.
44/d, Indrayani appartment
Lokmat Square
Nagpur – 440014
Date: 09/08/2022
To
The Branch Manager
HDFC Bank
Shivaji Nagar Branch
Nagpur – 440010
Sub: Home Loan Foreclosure Letter
Dear Sir/Madam,
We, Suman Sharma and Arpan Sharma, wife and husband respectively, have a joint account in your bank. Also, currently we are holding a home loan with the loan account number 199288777.
However, we wish to foreclose our home lone. Therefore, we are willing to pay the outstanding loan amount of INR 5 lakh at one go.
Hence, we request you to do the needful and walk us through the other procedure.
For instance, we have attached our PAN card copies, and address proof for your reference.
Thank you
Yours sincerely
(Signature)
Suman Sharma
Contact number: 9000000000
(Signature)
Apran Sharma
Contact number: 91111111111
Attahced documents:
- PAN card
- Address proof
How To Obtain a Loan Foreclosure Letter From Bank?
- Â Firstly, write a foreclosure letter to the bank. Also, mention and attach the loan account number, copy of PAN card, and address proof.
- Once the bank receives your letter, they will calculate the amount you still need to pay.
- The bank will inform you the amount and then you will have to make payment via NEFT, RTGS, or cheque.
- Additionally you need to pay some charges for foreclosing the loan.
- Also, you need to give a no-dues certificate along with necessary documents.
Frequently Asked Questions
Q1. What do you mean by foreclosure letter?
Answer. When you repay or wish to repay the remaining outstanding loan amount in one go, then you need to write a foreclosure letter.
Q2. How long does it take to get a foreclosure letter?
Answer. You may receive the foreclosure letter within 15-30 days after foreclosure. Still, you need to take follow ups from the lender. Once you receive the certificate, make sure every detail is correct.
Q3. Does foreclosure of loan affect cibil?
Answer. No. if your credit score is good, then foreclosing a loan will not impact it. Additionally, it creates a good impact to future lenders about your commitment for repaying the loan.
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