how to draft a loan application letter

Published In: Applications

How to Write a Loan Application Letter (with Samples)

Sometimes we need financial assistance to push through with our business idea, education, medical emergencies, or any other personal project or goals that require a huge amount of money for its realization. Basically, it is for this reason that banks and other money lending institutions exist.

Applying for a loan from any lending institution requires the applicant to first fill out a form.  Along with this form, the applicant can attach a loan application letter that provides more details on what he/she intends to do with the money and an overview of how the loan will be paid.

As a loan applicant, you need to learn how to write the loan request letter in a polite and convincing tone to appeal to your lender for your loan to be granted successfully.

What is a Loan Application Letter?

A Loan application letter is a document that informs the financial lending institution of the amount of money you are asking for, a clear outline of what you intend to do with the money, and convinces the bank why you are a good investment risk. Because it is a request, a loan application letter should be written in a polite tone, short and to the point.

The Loan Application Process

Based on the financial institution you choose, the process and time it takes for you to receive funding may vary. However, the typical loan application process may take on the following critical stages:

Pre-qualification stage

Prior to the loan contract, the potential borrower receives a list of items that they need to submit to the lender for them to get a loan. This may include Identification proof, credit score, current employment information, bank statements as well as previous loan statements.

Immediately this information is submitted, the lender reviews the documents and makes a pre-approval- meaning the borrower can move on to the next phase of the loan application process.

Loan application

In the second phase of the loan origination process, the borrower fills-in the loan application form either electronically- through mobile apps, websites, or paper-based. The data collected is then tailored to specific loan products.

The aspects that are included in the loan application form include the following;

The payment method- if it will be personal, through a check, or via online banking.

The payment frequency- There are several payment frequency methods, for example, Monthly installments, annually, or if the loan will be paid once.

The amount of interest accumulated on the loaned amount. This is the amount of money charged by the lender to the borrower on top of the amount which he/she has loaned.

The assets in the form of properties of the borrower will serve as collateral damage/guarantees in case the borrower defaults loan repayment or is unable to make his payments as per the agreed time.

Application processing

Once the application is received by the credit department, it is reviewed for accuracy, genuineness, and completeness.  Lenders then use Loan Originating Systems to determine an applicant’s creditworthiness.

Underwriting process

This process only begins after an application is totally completed. In this stage, the lender checks the application in consideration of various accounts, such as an applicant’s credit score, risk scores, and other industry-based criteria. Today, this process is fully automated using Rule Engines and API integrations with credit scoring engines.

Credit Decision

Based on the results from the underwriting phase, the lender makes a credit decision. The loan is either approved, denied, or sent back to the originator for additional information. If the criteria used do not match with what is set in the engine system, there is an automatic change in the loan parameters, for instance, reduced loan amount or a different interest rate on the loaned amount.

Quality Check

Quality check of the loan application process is very critical since lending is highly regulated. The loan application is then sent to the Quality Control Team to analyze critical variables of the loan against internal and external regulations on loans. This is often the last step of the application process before funding is approved.

Loan funding

Once the loan documents are signed by both the borrower and the lender, funds are released shortly after. Nevertheless, business loans, loans on properties, and second mortgage loans may comparatively take more time to be approved due to legal and compliance reasons.

Essential Elements of a Loan Application Letter

Now that you have already understood the complex loan application process, it is important that you know the critical points to include in your loan request letter to convince your lender to give you a business loan.

Here is how to effectively write a loan application letter:

Header and greetings

The first and most important element of your business or personal loan application letter should be a header and an appropriate greeting.

In your header, include the following details:

• Your business names
• The physical address of your business
• Business telephone and cell phone numbers
• Lender’s contact details
• Lender’s or Loan Agent’s Name and Title
• A subject line stating the loan amount you are requesting for.

Once you have written your header, include a friendly but professional greeting to start off your loan application letter in a cordial tone.

Business Loan Request Summary

The body of your business or personal loan request letter should start with a brief summary of your loan request amount, why you need the loan, your basic business information, and why you are an ideal risk investment for the lender. This section should be brief and concise. Only include the relevant information to capture your loan agent’s interest and keep them reading the body of your loan application letter.

Basic Details about your Business

Ideally, this is the third paragraph of your loan application letter. Use a few short and concise sentences to give a clear outline of your business.

Be sure to include the details below:

• The legal name of your business and any DBA that your business uses
• Your business structure- if it is a corporation- partnership, individually owned, etc.
• A summary of what your business does.
• How long your business has been operational
• Total number of employees
• A brief description of your current annual revenue

Once you have provided your basic business information, it is time to write the meat of your business loan request letter- clearly explaining why you need the business loan and how you intend to recuperate the investment.

The purpose of the business loan

In the fourth paragraph of your loan application letter, explain succinctly how you will use the business loan. Additionally, tell the lender why your intended use of the business loan will be a wise business investment.

While detailing this section, be as specific as possible and demonstrate to the lender that you have carefully considered the kind of revenue generation this new debt will accomplish for your business. for instance, don’t just say that you intend to use the loan for working capital. Rather, say that you plan to increase your inventory by 45% or that you need to increase your Human Resources to 4 to generate more income by 6%.

In the same paragraph, inform the lender exactly how the loaned amount will help generate more profits necessary to cover repayment plus the interest accumulated on loan.

Proof that you’ll be able to fully repay the loan

In this section, you need to demonstrate to the lender that you can pay back the loaned amount together with interest as per the agreed repayment period. You will want to use any figures from your latest income statements or balance sheets to prove your business is financially healthy and that it is a low-risk investment decision for your lender. In case you have other existing debts, be sure to mention them and include a business debt schedule if possible. If your business is profitable, highlight that in your letter since it something that most lenders pretty much look for in successful loan applicants.

In addition to that, consider including specific cash flow projections to demonstrate to your lender how you plan to fit repayment of the loaned amount plus interest into your budget.

Sample: Loan Application Letter

Sample 1: business loan application letter.

Samira Mitchell,

Mitchell Face Masks Limited,

4680 Forest Road

939, New York.

January 17, 2021

Mr. Wesley Kingston

Guarantor Trust Bank

679, New York State

Ref: Loan Request for $10,000

Exactly two years ago, I started my small face mask vending business in our local market. Over the last two years, my business has picked up really well to an extent where I need to expand to a bigger face mask vending company.

It is for this reason that I am writing this letter. I am confident that there is a great market niche for face masks, especially due to the current worldwide Novel Covid-19 Pandemic. Thus far, I have had many repeat customers, new customer links through referrals, and my client base has grown rapidly. Generally, there is an increase in demand for my products; therefore, I am requesting for a loan amounting to $10,000 to be able to supply more and satisfy all my clients.

This money, along with the amount that I have saved up from my profits, will enable me to lease a large, modern storefront and to import supplies that will help me launch my business plan.

I have attached my business plan, my latest business balance sheets, current business schedules, as well as my credit history statements for your perusal and review. If you have any questions or need any further clarifications, please contact me directly on (111) 345 679 or email me at Mitchel.facemasksltd.co.ke. Thank you for your consideration.

Samira Mitchel.

Sample 2: Personal Loan Application Letter

Dear Michael,

It is common for everyone to face difficult situations and bitter realities in life. I am currently facing a situation where everything seems bleak, and there seems to be no way out of this difficult situation. I am in debt, and I need to pay at least 30% of my house’s mortgage will be taken over by the bank, and I am currently ailing and weak, I’ll not be able to survive such a nervewrecking situation.

The only way I can avoid such a fate is by paying the full amount that is needed by the bank. I can be able to do so if I am allowed to take out a loan from the office, which is a privilege that the company has granted to all the employees. I would be thankful if the company allows me to borrow the money against my monthly pay.

Mr Brandon Brown

Do’s and Don’ts of Writing a Loan Request Letter

A loan application letter may increase or break your chances of receiving funding from any lending institution. This is because it is the first thing that lenders look for in the underwriting process when you submit an application. That said, you must know the dos and don’ts of writing a winning loan request letter to help you receive the funding that you really need.

• Check your personal and business credit scores before sending a loan request letter and take the necessary steps to improve them.
• Have all your financial statements ready, including cash flow statements, business balance sheets, P$L statements, etc
• Make sure to submit all your relevant credentials along with your loan application request letter.
• Always provide the correct and factual information to avoid fraudulent consequences.
• Don’t make your letter too long and unnecessarily wordy
• Don’t use an informal format while writing the loan application letter. Instead, follow the proper rules on writing formal letters
• Don’t include any false information in your loan request letter- be it your business’s current financial health, assets, and liabilities that may be used as collateral damage in case you default payment or why you need the money.

Things to Remember When Writing a Loan Application Letter

Generally, you should always consider the following essential tips if you want to write a winning loan application letter:

• The loan application letter is a formal document. Therefore, observe the proper rules of writing a formal letter.
• Clearly state your intent to borrow a given amount of money
• Provide a vivid but brief description of why you need the money. Your explanation should be concise, genuine, and transparent. While at it, explain how you plan to use the loaned amount and be very sincere about it.
• Explain why your business is a low-risk investment decision for the lender.
• Enumerate your assets and liabilities
• Include the time, date, manner, and method that you will use to make your payment.

Free Loan Application Letter Templates

Are you looking to get some financing for your business or personal emergency? Download our free, well-crafted Loan application letter templates to help you customize your loan request letter. Our Templates includes all the critical elements of a winning loan request letter that will successfully help convince your lender to grant you the funding you need. Download our templates today to help you get started!

Collateral is defined as something that helps secure a loan. Generally, based on the type of lending institution you pick, the lender will give you less than your pledged asset value. Lenders every so often quote an acceptable loan to value ratio, meaning that if you borrow against your house, for example, and it worth $400,000, you will be given a loan amounting to $380,000. Again, this depends on the bank.

The prepayment penalty is a fee that some lenders charge if you pay off all or part of your loan before the loan’s maturity date. These do not usually apply if you pay extra principal on your loaned amount in small amounts at a time. However, it is good that you counter check with your lender.

Every lender follows a different criterion to approve a business or personal loan. The application process depends on several factors; therefore, the time taken to receive funding in your account may take anywhere from a few minutes to several days. This depends on the type of institution you choose and the type of loan you are asking for.

Acquiring a loan is sometimes a necessity in one’s business or personal life.  Nonetheless, it is not always easy to get a loan as lenders are wary of granting loans due to loan repayment defaults and fraudulent borrowers. This article has provided you with great insight on loan application letters, the loan application process, essential tips for writing a winning loan application letter, and the dos and don’ts of writing a convincing loan request letter. If you keep these things in mind every time you are thinking of applying for a loan, you are sure to get the funds you need to ensure the smooth running of your business and sort any personal emergency that may come your way.

Related Documents

How to Write a Loan Application Letter

Table of Contents

Sometimes, taking out a loan can become inevitable. Whether dealing with piled-up medical bills or a financial emergency, it’s common to turn to fast and convenient borrowing options. According to statistics, advances and loans accounted for more than 60% of bank assets in the European Union in 2021. 

If you wish to take out a loan, you’ll have to fill out a loan application or request letter that details what you need the money for and how you’ll use it. The best way to appeal to a lender is by using a convincing tone and showcasing a clear plan for the money. Keep reading as we look at ways you can achieve this and ensure that your loan is granted successfully. 

What is a Loan Application Letter?

A loan application letter is a typed or handwritten letter provided to your lender, helping them decide whether to approve your loan request. This letter is written when the borrower is seeking financial assistance from a lender to pay off some bills or other expenses. 

When Do You Need One?

You might require a loan application letter in the following financing situations:

• When you wish to borrow money from the SBA (Small Business Administration) since it recommends and encourages applicants to start their loan proposals with an executive summary or a loan application letter
• When a borrower opts for a loan from a conventional bank lender and has to demonstrate that their business is financially viable and experiencing growth

In some situations, you aren’t required to write a loan application letter. These include scenarios like when a borrower is seeking equipment financing and said equipment serves as collateral, when someone requests a business line of credit with business bank statements or financial statements, and when a borrower seeks a term loan online using alternative lenders who want to go over your recent bank statements. 

Essential Loan Application Elements

There are specific guidelines you need to follow when writing a loan application:

1. Header and Greeting

Whether you’re filling out a loan application letter for a personal or business loan, it’s crucial that you start with a header and greeting. Include several sentences that outline the necessary, accurate details of your loan request in the header. If you’re opting for a business loan, then you need to include the following details:

• Company name
• Company phone number
• Company address
• Loan agent or lender’s name and title
• Loan agent or lender’s contact details
• A subject line stating the desired loan amount

Follow this by incorporating a greeting right below the header so that you introduce your application with a friendly tone. 

2. Loan Request Summary

You will have to provide your lender or loan agent with an overview of your loan request in this section. Ensure this section is concise, detailing only crucial information that’ll enable the lender to reach the letter’s body quickly. Entrepreneurs applying for a business loan should state why they are trustworthy borrowers, basic business details, the ideal loan amount, and the use of the loan. 

3. Basic Business Details

It would be best if you started by making a clear loan request which includes the amount you wish to borrow. When you write a few sentences about the workings of your business, they should include the following information:

• The legal business name 
• Any DBA used by the organization
• The amount of time the business has been operating
• The business structure
• Number of employees
• An overview of what the company does
• Profits and annual revenue, if applicable

Once this is done, you can move on to the next step, which is explaining why you need a loan. Don’t also forget to outline how you plan to repay the owed amount if the lender grants the loan.

4. Loan Usage

Every lender’s goal is to minimize risk as much as possible, so don’t be surprised if they carefully scrutinize your application before deciding whether to accept or disapprove it. They will assess whether you can pay back the loan entirely on time. Make a solid outline of how you intend to use the loan and why granting you the funds is a wise investment. It’s essential to inform the lender that you have clear goals you will accomplish if the loan application is approved. 

5. Proof of How You’ll Pay Back the Loan

In order to show your company’s financial health, you’ll need to use figures from the latest balance sheet or income statement. These records are essential because they demonstrate that you can repay the loan. 

Additionally, you must include any additional business finances to prove you’re a low-risk investment. State down any existing debt and a schedule detailing how you’ll pay it back if you owe someone else money. Perhaps, you’re a new business, but profits are stable. In that case, ensure you mention this, as it proves your ability to repay the loan. 

Once you achieve this, you can add a particular cash flow prediction to give the lender an idea of your payback plan, including the principal and interest amount. 

6. Give Accurate Information

There’s no doubt that lending money is a risky investment. You can make your lender’s life easier by providing factual and correct details to ensure both parties agree with the terms of the deal. For example, include your accurate credit history. If you are dishonest during the loan application process, you will be considered a fraud, and there will be repercussions for your actions. 

Tips for Writing a Loan Application Letter

• Before sending a loan letter request, check your business and personal credit scores and whether you need to take specific steps to improve them
• Provide transparent, genuine, and concise explanations
• Ensure all information is factual and relevant
• Keep all your financial statements ready, such as business balance sheets, cash flow statements, PSL statements, etc
• Submit every relevant credential with your loan application request letter
• Include the date, time, method, and manner you’ll use to make your payment
• Avoid writing a letter that is unnecessarily wordy and long
• Follow the rules available online on writing formal letters, so you don’t use an informal tone while assembling your loan application letter
• Whether including your business’s current assets, liabilities, or financial health, don’t jot down false information that can get you into legal trouble.

Loan Terms and Penalties

If you fail to pay your loan on time, cancellation fees or penalties may apply that depend on the number of days you’re overdue on the payment. For example, if you’ve looked into how to get a title loan with a lien , you know that your car will be used as collateral. In case you default on payment or provide false information, you are likely to lose ownership of the vehicle.

You should go through the loan terms and conditions as this will enable you to determine how many days your payments can be delayed, how much penalties are for late payments, and the amount you’ll be charged if you cancel your loan. Choosing a loan provider that offers the lowest and most amenable terms is recommended. 

Whatever reason you have for acquiring a loan, writing a solid loan application letter will improve your chances of obtaining the financial help you need. This application letter should be composed in a polite, convincing tone and include accurate information. You can do thorough research to pick a lender whose provided options align with your requirements. Consider beforehand how much money you need and apply for the relevant loan. 

Join the thousands who have sharpened their business writing skills with our award winning courses.

Copyright © 2024 Businesswritingblog.com.

Letters.org

The Number 1 Letter Writing Website in the world

Sample Loan Application Letter

Last Updated On December 25, 2019 By Letter Writing Leave a Comment

Loan application is written when the applicant wants to seek monetary assistance in the form of loan mostly on a mortgage of property. Since it is a request, the letter should be written in a polite tone.

Use the following tips and samples to write an effective loan application letter to a bank manager or a company.

Sample Loan Application Letter Writing Tips:

• As loan application letter is formal, the phrases and words should be chosen carefully.
• The language used should be simple and easy to understand
• The content of the letter should be short and straightforward.

Sample Loan Application Letter Template

__________ (Branch Manager’s name) __________ (Branch address) __________ __________

______________ (Your name) ______________ (Your address) __________________

Date __________ (date of writing letter)

Dear Mr. /Ms_____________ (name of the concerned person),

I have a savings account in your bank with account no._________ for the past …………… years. I want to apply for a ……………..(type of loan) loan for ………………….(state purpose) .

If you can inform me about the details and formalities required for seeking the loan, I shall make all the arrangements and meet you at the earliest.

Looking forward to meeting you,

Thanking you,

Yours Sincerely,

___________ (Your name)

Sample Loan Application Letter Sample, Email and Example/Format

Pavan Kumar 3214 Breeze apts Worli Hyderabad

The Branch Manager, Axis Bank, Station Road Branch, Hyderabad

30th September 2013

Subject: Loan application letter

Dear Sir/Madam,

I have a savings account in your bank for the last five years. I want to avail a home loan from your bank. I would like to know the details to seek a home loan from your bank.

I am a salaried employee, and I work for a central government organisation as a research scientist. You can verify my salary certificate and other details.

As the home loan interest rates have down, I would like to utilise this opportunity to buy a house. I have already booked a flat in Banjara Hills Hyderabad, and I need about Rs 35 lakhs as the loan amount. With my pay scale, I think I am eligible to seek a loan for this amount.

If you can send your representative to my place, we can discuss and finalise the loan. I shall keep all the documents ready so that there will not be a delay in processing the loan.

Looking forward to hearing from you,

_____________

Pavan Kumar

Email Format

A loan application letter is written to ask for financial credit service on some secured mortgage basis. As it is our requirement, the words should be so humble and sincere that the banker or the lender acquires total trust on the applicant. Loan application letter helps the loan applier to appeal for the various types of loans whichever he wishes to depend upon certain conditions.

I have sent this letter to you to explain my reasons behind requesting a loan modification on my mortgage. I wish to purchase a Mercedes Benz 300 Limousine costing Rs 56 lakhs. I am seeking an interest reduction down to 6.25% from my current 8.80%. I feel it is a fair percentage for you, and it is just within my means.

Without a reduction on the interest, I will not be able to afford the monthly payments. I have to choose between a loan modification and a foreclosure. I would far prefer the former, and you probably would as well. 6.25% is the most I will be able to manage, even if I cut all of my expenses out of the picture. Please consider my application seriously, and I hope to hear more from you on the matter.

Yours Faithfully,

____________

Jimmie Verna Melendez.

Related Letters:

• Sample Application Letter
• Sample Job Application Cover Letter
• Sample College Application Letter
• Sample Application Cover Letter
• Sample Scholarship Application Letter
• Job Application Letter
• Transfer Application
• Application Letter by Fresher
• Application Letter for Referral
• Business Application Letter
• College Application Letter
• Credit Application Letter
• General Application Letter
• Good Application Letter
• Grant Application Letter
• Letter Of Intend Application
• Job Application E-Mail Template
• Job Application Letter Format
• Job Application Letter Template
• Receptionist Application Letter
• Solicited Application Letter
• Summer Job Application Letter
• Work Application Letter
• Unsolicited Application Letter
• Corporation Application Letter

Leave a Reply Cancel reply

You must be logged in to post a comment.

Guide to writing a mortgage letter of explanation (with template)

Your lender asked for a letter of explanation. what now.

When you apply for a home loan, your lender will do a deep dive into your financial history. Depending on what it finds in your bank statements or credit report, additional documentation may be necessary.

You may be asked for a “letter of explanation” during the application process. Fear not. Letters of explanation are fairly standard and nothing to worry about.

However, you want to make sure you write this letter correctly, as it could be crucial to your mortgage approval.

Here’s everything you need to know so you can hit a home run with your letter of explanation.

In this article (Skip to...)

• What is a letter of explanation?
• How to write one
• Sample letter
• Final advice

What is a mortgage letter of explanation?

Commonly referred to as an ‘LOE’ or ‘LOX,’ letters of explanation are often requested by lenders to gain more specific information on a mortgage borrower and their situation.

An LOX can necessary when there is inconsistent, incomplete, or unclear information on a loan application.

Letters of explanation may be required if any red flags turn up during the underwriting process, such as:

• Declining income
• Gaps in your employment history
• Differing names on your credit report
• Large deposits or withdrawals in your bank account
• Recent credit inquiries
• An address discrepancy on your credit report
• Derogatory items in your credit history
• Late payments on credit cards or other debts
• Overdraft fees on an account

There are many other situations where an LOX may be requested, too.

If you need to write one, be sure to ask your loan officer what exactly the underwriter wants to see, and whether you need to provide any supporting documentation along with the letter.

How to write a letter of explanation for your mortgage lender

When it comes to mortgage letters of explanation, less is typically more.

Too much unnecessary information may lead to confusion, or at minimum, additional questions about your file — questions that may have been avoided if it weren’t for some of the details in your letter.

The most important elements of your letter of explanation should include the following:

• Facts — Be honest. Never be tempted to write a letter based on solely on what you may think your lender wants to hear. You shouldn’t fabricate any aspect of your letter. Include correct dates, dollar amounts, and any other pertinent details for your situation
• Resolution — Your lender wants to know how and when the situation that led up to certain events was resolved. For instance, if you were temporarily furloughed during COVID, but you’ve since returned to full employment, you should be able to document your recent paystubs and have your employer verify that you’ll continue working full time for the foreseeable future
• Acknowledgement — This one is important and shouldn’t be left out of your letter. Mortgage underwriters want to know why it is that something happened, and how or why it won’t happen again in the future

Remember that a letter of explanation is a professional document that will go into your loan file.

Be mindful of things like spelling, grammar, and punctuation. Create a letter that’s visually appealing, properly formatted, and communicates the relevant information.

Providing additional documentation with your letter can be helpful. For example, if hospitalization was the culprit behind some missed payments on your credit report, it may be helpful to include hospital bills.

Sample letter of explanation and template

Remember to be honest, formal, and concise when writing a letter of explanation for your mortgage lender.

The exact content will vary based on your situation, but here’s a general letter template you can use as a guide. (Click the image to open a PDF version.)

Remember to include your mailing address, phone number, and the number of your mortgage loan application (or the property address for which you’re applying).

Final advice on writing a letter of explanation

You’ll be asked to submit a pile of documentation during the mortgage loan process, including bank statements, tax returns, pay stubs, and more.

Depending on your financial situation, your lender may also request a letter of explanation. Many first-time home buyers think being asked to provide a letter of explanation means their mortgage application may be doomed.

Remember, this type of request is usually a good thing. The underwriter may be looking for this last item before signing off on your final approval.

When your lender requests a mortgage letter of explanation, remember this first: don’t panic.

Next, double-check with your lender on exactly what is being requested.

Then write a clear, concise letter that’s free of emotional language, negativity, or excessive detail. There’s a good chance that the next time you hear from your lender, it will be to let you know you’re fully approved.

Home > Finance > Loans

How to Properly Write a Business Loan Request

We are committed to sharing unbiased reviews. Some of the links on our site are from our partners who compensate us. Read our editorial guidelines and advertising disclosure .

Have to submit a business loan request letter as part of your loan application? Not sure how to get started?

We don’t blame you. These kinds of letters aren’t as common as they used to be. While online lenders don’t usually ask for small-business loan requests, some traditional banks and credit unions still do. And if you apply for an SBA business loan (a loan backed by the US Small Business Administration), you’ll need a small-business loan request as part of your loan application package.

No matter which lender you’re applying with, this guide will help you write a strong business loan request letter―and to get the business loan you need.

How to write a business loan request letter

• Start with the easy stuff
• Write a brief summary
• Add information about your business
• Explain your financing needs
• Discuss your repayment plan
• Close the letter

1. Start with the easy stuff

Writing a loan request can feel overwhelming. After all, it’s not an everyday part of being a small-business owner. What do you say when applying for a bank loan? How do you write a business proposal for your loan application? What’s your lender even looking for in a business loan request letter?

That’s why we suggest starting your request writing process with the easy bits: formatting.

You’ll want to begin your business loan request with some pretty standardized formatting that includes your contact information, the date, your lender’s contact information, a subject line, and a greeting.

Typically, you’ll want to format the beginning of your small-business loan request roughly like this:

First and last name

Business’s name

Business’s phone number

Business’s address (this one is optional)

Lender name (or loan agent’s name and title, if you have one)

Contact information for your lender or loan agent

Subject line

Obviously you can simply plug in the relevant information for most of this. Easy peasy, right?

You’ll really only have to come up with your own subject line and greeting. But don’t overthink it. Something like this will work just fine for your subject line:

• Re: [Your business’s name] business loan request for [loan amount]

Likewise, keep your greeting simple. “Dear [lender]” or “Dear [loan agent]” will do quite nicely.

Got all that? Then you’re ready to get into the actual loan request.

By signing up I agree to the Terms of Use.

2. Write a brief summary

Before you dive into the meat of your loan request, you should give a brief summary of your letter. Just write a short paragraph that says why you’re writing and what you want.

So you’ll probably want to include the following details:

• Business name
• Business industry
• Desired loan amount
• What you’ll use the loan for

No need to get fancy with this. You’re trying to condense the most important information into one or two sentences.

For example, your summary might look something like this:

• I’m writing to request a [loan amount] loan for my small business in the [industry name] industry, [business name]. With this loan, [business name] would [describe your intended business loan use].

As you can see, you don’t need much detail here. You’re just giving the reader a quick overview of what’s to come.

And now that you’ve given them that preview, it’s time to get more in depth.

Remember, your lender isn’t here to grade your writing. Try to use good spelling, grammar, and punctuation―but don’t stress about crafting beautiful sentences.

3. Add information about your business

Your next section should add more detail about your business. You’ll want to include information like this:

• Business’s legal name (if different than name used)
• Business’s legal structure (LLC, partnership, S corp, sole proprietorship, etc.)
• Business’s purpose
• Business’s age (or date it began operating)
• Annual revenue
• Annual profit (if applicable)
• Number of employees

Now, keep in mind that you’re not trying to give your reader an encyclopedic history of your business. Instead, you’re trying to show that you have a well-established business―one that’s solid enough to deserve a business loan. So focus on relevant details that show your business’s maturity.

You can keep this section as short as a few sentences or as long as a few (brief) paragraphs. Just make sure you leave plenty of room for the next two sections.

4. Explain your financing needs

After discussing your business, it’s time to explain why you need a bank loan.

That means you’ll want to offer some details about how you plan to use your business financing. For example, you can talk about the employees you plan to hire, the building you want to expand, or whatever else you intend to do with your term loan .

Take note, though, that you also need to explain why your loan request makes sense. Because your lender doesn’t really care that you want a loan―it cares whether or not it makes sense to lend to you. You need to convince your lender that you have a good plan for your loan―one that will make it easy to repay the money you borrow.

Try to answer questions like these as you write this section:

• Why should your lender want to approve your loan application?
• What happens to your business if you get your small-business loan?
• What kind of growth will your business loan allow for?

Dig into your business plan and projections to find some good stats. Explain how hiring those additional employees will increase your revenue by a certain percentage or dollar amount. Break down how opening that add-on to your restaurant will allow you to seat a number of additional customers, and how much revenue you expect that to bring in.

The more specific you can get, the better. Because again, you’re trying to convince your lender that you’re borrowing as part of a thoughtful business plan ―not just because you want some cash.

And take your time with this part. In most cases, this section and the next one will form the meat of your business loan request letter. 

As a rule, you should keep your business loan request letter to one page.

5. Discuss your repayment plan

By this point, your lender should understand what your business does and why a loan would help it grow. Now you need to prove to your lender that you can repay your small-business loan.

This doesn’t mean you have to show precise calculations breaking down your desired interest rate and monthly payment. (After all, your bank probably hasn’t even committed to a specific interest rate yet.)

Instead, talk about things like your business’s past finances, other existing debts, and any projections can you offer.

So if you have a profitable business, point that out, and discuss how that will free up cash flow to repay your loan. Offer summaries of profit-and-loss statements that show your business has been growing. Tell your lender how you’ll pay off that existing loan within a few months, so they don’t need to worry about it interfering with repayment of your new term loan.

Put simply, this is your chance to convince your lender of your creditworthiness. Especially if you have a slightly low credit score or some other concern, you want to use this section to show that you will absolutely repay your loan.

6. Close the letter

Finally, you can add a few finishing touches.

Usually you should close with a short paragraph or two that refers the reader to any attached documents (like financial statements) and asks them to review your loan application.

You may also want to include a sentence expressing willingness to answer any questions―or just saying you’re looking forward to hearing back.

Then end things with your signature, list any enclosed documents, and you’re done!

Well, sort of.

At this point, we strongly recommend you print off your business loan request letter and read it―out loud, if possible. This will help you catch any errors. Because no, your lender isn’t a writing teacher, but you still want to make a good impression.

Plus, if you make typos on something like your business name or desired loan amount, that inaccuracy could lead to confusion from your lender―slowing down your loan approval process.

Once you’ve proofread your loan request letter, you’re ready to submit it to your lender. With any luck, your thoughtful letter will help convince your lender to give you that loan you want.

Loan proposal letter template

So how do all those steps look when you put them together? Something like this:

            First and last name

            Business’s name

            Business’s phone number

            Business’s address (this one is optional)

            Date

            Lender name (or loan agent’s name and title, if you have one)

            Contact information for your lender or loan agent

            Subject line

            Greeting

This first paragraph should summarize the rest of your letter. Keep it to just a couple sentences.

The next one to three paragraphs add more detail about your business. Include facts about its age, revenue, profit, employees, and other relevant information.

Then explain why you need financing and how you’ll use it to grow your business. This section can be a little longer (but remember your whole letter  should fit on one page).

Next, talk about how your business will repay your loan. You may want to mention how financial documents show your business’s financial health, for example.

Finally, close with a short paragraph or two that list any enclosed documents and invite the lender to consider your loan application.

Printed name

List of enclosed financial documents

That’s not so hard, is it? With this basic business loan request letter template, you can easily write your own personalized business loan proposal.

The takeaway

So there you have it―that’s how to properly write a business loan request.

Get your formatting right, include a short summary, talk about your business, explain your loan needs, prove you can repay your loan, and close things off. (And don’t forget to proofread.)

We believe in you. You can write this thing.

And good luck getting your loan application approved!

Don’t just tell your lender you can repay your business loan―make sure you can with our business loan calculator .

Related reading

Best Small Business Loans

• How to Get a Small Business Loan in 7 Simple Steps
• 6 Most Important Business Loan Requirements
• How Long Does It Take To Get a Business Loan?
• Commercial Loan Calculator

At Business.org, our research is meant to offer general product and service recommendations. We don't guarantee that our suggestions will work best for each individual or business, so consider your unique needs when choosing products and services.

5202 W Douglas Corrigan Way Salt Lake City, UT 84116

Accounting & Payroll

Point of Sale

Payment Processing

Inventory Management

Human Resources

Other Services

Best Inventory Management Software

Best Small Business Accounting Software

Best Payroll Software

Best Mobile Credit Card Readers

Best POS Systems

Best Tax Software

Stay updated on the latest products and services anytime anywhere.

By signing up, you agree to our Terms of Use  and  Privacy Policy .

Disclaimer: The information featured in this article is based on our best estimates of pricing, package details, contract stipulations, and service available at the time of writing. All information is subject to change. Pricing will vary based on various factors, including, but not limited to, the customer’s location, package chosen, added features and equipment, the purchaser’s credit score, etc. For the most accurate information, please ask your customer service representative. Clarify all fees and contract details before signing a contract or finalizing your purchase.

Our mission is to help consumers make informed purchase decisions. While we strive to keep our reviews as unbiased as possible, we do receive affiliate compensation through some of our links. This can affect which services appear on our site and where we rank them. Our affiliate compensation allows us to maintain an ad-free website and provide a free service to our readers. For more information, please see our  Privacy Policy Page . |

© Business.org 2024 All Rights Reserved.

All Formats

13+ Loan Application Letter Templates

Thinking of asking for a loan? Opening up a business and need the extra money to kick your idea into existence? Loan applications form are a standard piece of document that is significant when asking for a sample loan , and in this website, we provide you with ample of application letter templates for loan to choose from and use.

Business Loan Application Letter Template

Car Loan Application Letter Template

Personal Loan Application Letter Template

Loan Forgiveness Application Letter Template

Calamity Loan Application Letter Template

Sample Loan Application Letter Template

Loan Application Letter Templates

What Is a Loan?

How to fill out a loan application, employee loan application letter template.

Medical Loan Application Letter Template

Basic Loan Application Letter Template

Bank Loan Application Letter Template

Tips before Filling for a Loan

• Why do I need the loan for?
• How will it help my business?
• How will I spend it?
• Who will manage the loan?
• Start by filling up the basics, such as the type of business, the name, contact numbers, and the legal structures.
• Typically after the application, there will an agreement concerning fees associated with the loan. These should be discussed personally with the lender.
• Be sure to double-check that every question is filled. If anything is amiss, the application might end up with the underwriter and may be delayed.
• Be sure to bring plenty of back up documents when meeting personally the lender. These documents include a resume, a credit report templates, past tax returns, the business plan templates, and balance sheets .
• Do not be afraid to include too much information so that there would be an assurance of confidence from you lender that it is strictly business and is legitimate.

More in Letters

Loan requisition letter, loan application letter template, simple loan application letter template, loan application letter to employer template, loan application letter for school fees template, loan application letter to bank manager template, loan application letter for house rent template, loan application letter from employee template.

• FREE 26+ Covid-19 Letter Templates in PDF | MS Word | Google Docs
• Thank You Letter for Appreciation – 19+ Free Word, Excel, PDF Format Download!
• 69+ Resignation Letter Templates – Word, PDF, IPages
• 12+ Letter of Introduction Templates – PDF, DOC
• 14+ Nurse Resignation Letter Templates – Word, PDF
• 16+ Sample Adoption Reference Letter Templates
• 10+ Sample Work Reference Letters
• 28+ Invitation Letter Templates
• 19+ Rental Termination Letter Templates – Free Sample, Example Format Download!
• 23+ Retirement Letter Templates – Word, PDF
• 12+ Thank You Letters for Your Service – PDF, DOC
• 12+ Job Appointment Letter Templates – Google DOC, PDF, Apple Pages
• 21+ Professional Resignation Letter Templates – PDF, DOC
• 14+ Training Acknowledgement Letter Templates
• 49+ Job Application Form Templates

File Formats

Word templates, google docs templates, excel templates, powerpoint templates, google sheets templates, google slides templates, pdf templates, publisher templates, psd templates, indesign templates, illustrator templates, pages templates, keynote templates, numbers templates, outlook templates.

How to Write a Loan Application Letter in Nigeria

Do you find it difficult to write a loan application letter or you are clueless about how to go about the process?

No need to fret, you have come to the right page for a solution.

It is not surprising that a lot of Nigerians apply for loans in various financial organisations ranging from commercial banks, and microfinance banks, and that online loan apps are on the increase in Nigeria. 

Due to the current economic hardship coupled with debts incurred by some Nigerians, to settle their debts, they simply look forward to applying for a loan as a solution to their problems.

Nigerians apply for loans for different reasons and purposes. Some for their businesses, education, to pay off debt while some apply for loans to “japa”.

If you’re looking to apply for a loan here in Nigeria, in simple steps, I’ll guide and put you through how to write a loan application letter in Nigeria. 

Table of Contents

Applying For a Loan in Nigeria

Firstly, you need to have a plan, ask yourself the question “what do I need this money for?”

Will the business you’re planning to venture into be productive enough to pay back the loan you’re applying for in the bank?

If you don’t have a plan, at the end of the day, when you write the application for a loan, you often find it difficult to pay back the loan.

This is why some of these loan sharks make public the loan defaulters personal details on social media platforms creating public embarrassment to the defaulters and the people close to them.

Steps in Applying for a Loan  

The major thing you should look out for as you’re about to apply for a loan in Nigeria is the financial institution you want to go for.

Put in mind their interest rates, the loan duration (how long will it take for you to pay off?). 

Read properly the T&Cs, and read it line by line before you append your signature. 

Lots of Nigerians applying for loans make the mistake of not going through the terms and conditions thoroughly, you definitely don’t want to make this mistake to avoid “had I known?”

Don’t be too eager, I repeat, don’t be too eager.

Just recently someone told me something I want you to pick from, she said “one of the policies in giving loans is not to give a loan to a customer that is too eager, the one who never lets you rest”.

Read also: How to get loans without a salary account or collateral.

How to Write a Loan Application Letter

Writing a loan application letter in Nigeria is quite simple as you can refer to the letters you wrote while in school. 

Your loan application letter should be well detailed and concise, not verbose.

There are two things to consider here, are you applying for personal use or for your company?

If it is a personal loan, it is simple, all you have to do is to walk into any bank of your choice to make some findings.

Make sure you get a clean sheet of paper (A4 Paper), your identity card (work id is included), a letter of introduction from your working place if you’re an employee of an organisation.

I’ll list out in bullet points what should be included in your loan application letter so you won’t make any mistakes or leave any information out of your loan application letter.

NOTE: You’re writing a formal letter, not an informal letter.

• The bank’s address (include the branch manager if you’re addressing the letter to him/her. This should be on the left side of your A4 paper.
• Your address should be on the right side of your letter.
• Under the address to the bank, “Dear Ma/Sir” should be written.
• Heading: You should provide heading to your loan application letter. See more details in the samples below.
• Body of your letter: You should explain in detail the reason and the duration.

Read also: Top banks in Nigeria for entrepreneurs. 

Samples of a Loan Application Letter

Below are samples of loan application letters for an individual/personal use:

To the Branch Manager,

United Bank for Africa,

Lebanon Dugbe,

23rd April 2009.

40,  Boladuro Street,

Challenge Ibadan,

Dear Ma/Sir,

               LOAN REQUEST

  I (your name), with the account number (×××××××××) wish to request for a loan in your business office. 

    I look forward to hearing from you soon.

Thanks in advance.

Yours faithfully,

(Signature)

(Phone number).

Applying for a loan in the name of your company? Ensure you have a great turnover with the bank to get a good loan.

The letter for loan application should be on your company’s letterhead. You can’t apply for a loan in Nigeria as a company on a plain sheet of paper. 

        XYZ CONSULTING FIRM LTD.

            +234***********, 40 Boladuro Street Challenge Ibadan. Oyo State.

 To the Branch Manager,

No 40 Boladuro Street,

    Dear Sir/Ma, 

  Our company (name), with the account number (×××××××××) wishes to request for a loan in your business office to get some equipment for our business.

Sponsor your business on Insight.ng for a wider reach of your target audience.

Applying For a Loan on Your Mobile Phone

Do you know you can pick up your phone and apply for that loan you’ve been searching for? 

Simply visit the Play Store/Apple store app, there are lots of applications offering loan services. 

From Okash to New Credit, Fairmoney, 9ja Cash, Soko Loan and a host of others. 

It is not surprising that some Nigerians prefer to apply for a loan using these mobile applications than walking into the bank.

Everyone wants comfort and a very easy experience. 

Once you download the application of your choice, you click on the register button (all your information would be recorded together with your bank verification number).

While some Nigerians don’t like to apply for a loan from these Loan apps, due to the embarrassment/disgrace they put people  through if they fail to make payment after the payback day, some apply for the loan and pay back in due time. 

Read also: Top 10 best loan apps in Nigeria. 

  Conclusion

 I hope you’ve learnt a thing or two from this article on how to write a loan application letter in Nigeria. 

Whenever you’re in a fix or there’s something really urgent you need money to settle, you can simply visit any bank branch to make enquiries on the type of loan product they have to offer, or make use of online apps.

If you found this useful, subscribe to our newsletter for more insightful posts. 

About Author

Latest entries

Angela Ajani

Give her books and you've made her day. Ajani Angela is a graduate of History and International Studies from Bowen University, currently pursuing her Masters Degree in Peace and Conflict Studies at the University of Ibadan. Angela loves to read and meet new people. Her interests are not limited to just education; she also loves to offer advice to people going through a lot. Angela loves to hear from readers. You can email her at [email protected] .

Expertnaire Tutorial: How to Start Making Millions in Expertnaire in Nigeria

How to write news stories: path to becoming a successful journalist in nigeria, you may also like, 7 best return on investment calculators for business..., a guide to youtube automation for your business, the potential of hospitality and tourism business in..., exploring career opportunities in agriculture and agribusiness in..., 11 effective strategies for building a successful online..., effective strategies for managing cash flow in a..., leave a comment.

Save my name, email, and website in this browser for the next time I comment.

• Write for Us
• Sponsored Post
• Privacy Policy

©2024 Insight.ng  – All Right Reserved. Parent company for Business World Africa

Business Loan Application Letter Sample: Free & Effective

In this article, I’ll guide you through the process step-by-step, drawing from my personal experiences, and provide you with a handy template to get you started. Whether you’re a seasoned business owner or just starting out, these insights will help you craft a compelling letter that stands out to lenders.

Key Takeaways

• Understand Your Audience: Know the lender’s requirements and tailor your letter accordingly.
• Be Clear and Concise: Communicate your business’s needs and how the loan will be used in a straightforward manner.
• Provide Detailed Information: Include pertinent details about your business and your plan for the loan.
• Use a Professional Tone: Maintain a formal tone throughout the letter to convey seriousness and professionalism.
• Follow a Structured Format: Use a clear and logical structure to make your letter easy to read and understand.
• Include Supporting Documents: Attach essential documents that can vouch for your business’s credibility and financial health.

Step-by-Step Guide to Writing a Business Loan Application Letter

Step 1: understand the lender’s requirements.

Before you begin writing, it’s crucial to understand the lender’s criteria. Each financial institution has its unique set of requirements for loan applications. Familiarize yourself with these to tailor your letter effectively.

Step 2: Start with Your Contact Information

Begin your letter with your contact information at the top, followed by the date and the lender’s details. This establishes a professional tone from the outset.

Your Name Your Business Name Your Business Address City, State, Zip Code Date Lender’s Name Lender’s Institution Lender’s Address City, State, Zip Code

Step 3: Craft a Compelling Introduction

Trending now: find out why.

In the opening paragraph, introduce yourself and your business. Clearly state the purpose of your letter – to apply for a business loan – and the amount you are requesting. This sets the stage for the details that follow.

Step 4: Detail Your Business Plan

This is where you shine. Outline your business plan, emphasizing how the loan will contribute to your business’s growth. Be specific about how you intend to use the funds. Will they be used for expanding operations, purchasing equipment, or maybe for bolstering your working capital? Lenders want to see that you have a clear plan in place.

Step 5: Showcase Your Business’s Financial Health

Include a brief overview of your business’s financial status. Highlight your revenue, profit margins, and financial projections. This demonstrates to lenders that you have a viable business capable of repaying the loan.

Step 6: Mention Collateral (If Applicable)

If you’re offering collateral against the loan, specify what it is. This could be equipment, real estate, or inventory. Detailing the collateral reassures lenders about the security of their investment.

Step 7: Conclude with a Call to Action

End your letter by thanking the lender for considering your application and expressing your willingness to provide further information if needed. Include a polite request for a meeting or a conversation to discuss the application further.

Step 8: Professional Sign-Off

Sign off your letter with a professional closing, such as “Sincerely,” followed by your name and position within the company.

Template for a Business Loan Application Letter

[Your Name] [Your Business Name] [Your Business Address] [City, State, Zip Code] [Date]

[Lender’s Name] [Lender’s Institution] [Lender’s Address] [City, State, Zip Code]

Dear [Lender’s Name],

I am writing to apply for a business loan of [Loan Amount] for [Your Business Name]. As [Your Position] of the company, I am committed to guiding our business to new heights, and this loan is a crucial step in our growth strategy.

Our plan is to allocate the loan towards [Specific Use of Loan]. This investment is projected to [Expected Outcome of Loan Investment], enhancing our profitability and ensuring our ability to repay the loan.

Enclosed with this letter, you will find our business plan, financial statements, and cash flow projections, providing a comprehensive view of our business’s financial health and growth potential.

Thank you for considering our loan application. I am looking forward to the opportunity to discuss this further and am happy to provide any additional information required.

[Your Name] [Your Position] [Your Contact Information]

Tips from Personal Experience

• Personalize Your Letter: While using a template is helpful, adding personal touches that reflect your business’s unique aspects can make your letter stand out.
• Be Transparent: Honesty about your business’s current financial situation and how you plan to use the loan builds trust with lenders.
• Proofread: A letter free from grammatical errors and typos shows attention to detail and professionalism.

I’d love to hear your thoughts or experiences with writing business loan application letters. Do you have any tips to share or questions about the process? Feel free to leave a comment below.

Frequently Asked Questions (FAQs)

Q: What is a business loan request?

Answer: A business loan request is a formal request made by a business to a lender or financial institution for a loan to finance business operations or expansion.

Q: What information is typically included in a business loan request?

Answer:   A business loan request typically includes information about the business, including its financial history, plans for the loan proceeds, and a projected financial statement. 

It may also include personal financial information about the business owner or owners.

Q: How is a business loan request typically made?

Answer:   A business loan request is typically made in writing, through a loan application or business plan submitted to a lender or financial institution.

Q: What documentation is required to support a business loan request?

Answer:   Documentation that may be required to support a business loan request can include financial statements, tax returns, and personal financial information. 

It may also include business plan, projected financial statement, and any collateral that the business can offer.

Q: What are the potential outcomes of a business loan request?

Answer:   The potential outcomes of a business loan request can include the lender or financial institution approving the loan, denying the loan, or offering a modified loan amount or terms. 

The interest rate, repayment period, and other terms of the loan will be based on the creditworthiness of the business and the lender’s lending policies.

Q: What is a business loan request letter?

Answer : A business loan request letter is a formal written document submitted by an individual or a business to a financial institution or lender, seeking financial assistance in the form of a loan. 

It outlines the purpose of the loan, the amount requested, and provides supporting information to convince the lender of the borrower’s creditworthiness.

Q: How do I start a business loan request letter?

Answer : To start a business loan request letter, begin by addressing it to the appropriate person or department at the lending institution. 

Use a formal salutation such as “Dear [Lender’s Name]” or “To Whom It May Concern.” Introduce yourself or your business and clearly state the purpose of the letter, which is to request a loan.

Q: How should I structure a business loan request letter?

Answer : A business loan request letter should follow a professional and organized structure. It typically includes an introduction, a body, and a conclusion. 

The introduction should clearly state the purpose of the letter and provide essential details about yourself or your business. 

The body of the letter should elaborate on the loan request, including the amount needed, the purpose of the loan, and any supporting information or documents. 

Finally, the conclusion should express appreciation for the lender’s time and consideration, while offering your contact information for further communication.

Q: What tone should I use in a business loan request letter?

Answer : A loan request letter should maintain a formal and professional tone throughout. It should be respectful, concise, and polite. Avoid using overly technical jargon or informal language. 

It is important to demonstrate professionalism and credibility to increase your chances of a favorable response.

Q: How long should a business loan request letter be?

Answer : A business loan request letter should be concise and to the point, typically ranging from one to two pages. 

Avoid excessive details or unnecessary information that may distract from the main purpose of the letter. Keep the content focused, clear, and persuasive.

Q: What is the purpose of a business loan request letter?

Answer : The purpose of a business loan request letter is to formally request financial assistance from a lender or financial institution. 

It serves as a written proposal, outlining the borrower’s need for funds, the purpose of the loan, and the borrower’s ability to repay. 

The letter aims to persuade the lender that the loan is a viable investment with a solid repayment plan and potential for positive outcomes.

Q: How important is a business loan request letter?

Answer : A business loan request letter is crucial when seeking a loan from a lender or financial institution. 

It acts as a formal request, providing essential information about the borrower, the purpose of the loan, and the borrower’s ability to repay. 

A well-written and persuasive loan request letter increases the likelihood of the loan being approved, as it demonstrates professionalism, credibility, and a clear understanding of the borrower’s financial needs.

Related Articles

Personal loan request letter sample: free & effective, request letter for working capital loan: the simple way, personal loan paid in full letter sample: free & effective, sample letter to bank requesting extension of time for loan payment: free & effective, ask someone for money in a letter sample: free & effective, business loan request letter sample: free & customizable, leave a comment cancel reply.

Your email address will not be published. Required fields are marked *

Start typing and press enter to search

• Introduction

Step 1: Start with the FAFSA

Step 2: understand your financial aid award letter, step 3: complete additional paperwork (if required), what about private student loans, navigating the student loan application process.

Affiliate links for the products on this page are from partners that compensate us (see our advertiser disclosure with our list of partners for more details). However, our opinions are our own. See how we rate student loans to write unbiased product reviews.

• You'll apply for a federal loan with the FAFSA, and a private loan on the lender's website.
• The FAFSA takes about an hour to complete, while private applications can just a few minutes.
• You'll need a credit check to get a private loan and to get a Direct PLUS Loan from the government.

If you need help paying for college and didn't receive enough money through scholarships or work-study programs, you may need to take out a student loan to cover the costs of school.

Getting a student loan is a fairly straightforward process. You'll apply for the loan through a federal or private lender , then wait for the funds to be disbursed to your school.

The FAFSA is the key to obtaining federal aid. FAFSA — which stands for Free Application for Federal Student Aid — determines one's eligibility for loans, grants, and work-study. 

To get started, create your FSA ID , which is essentially your electronic signature for the FAFSA. Parents of dependent students also need an FSA ID. From there, check federal and state deadlines. And remember: Applying early is best!

You won't need a credit check with federal loans, with the exception of a Direct PLUS Loan , which is lent to the parents of undergraduate students or to professional and graduate students. This loan is not based on financial need and has a higher interest rate than subsidized or unsubsidized loans. 

Each school that you've been accepted to will send out a financial award letter detailing the aid package being offered. It will include grants, scholarships, work-study details, and federal student loans (subsidized and/or unsubsidized). After reading through your letter, decide which package makes the most sense for your situation. You don't have to accept the full loan amount offered.

If you have the option, you'll want to take out a subsidized loan over an unsubsidized loan . Subsidized loans are made based on financial need, and the government pays the interest on your loan while you're in school. Financial need doesn't factor into unsubsidized loans, and interest begins to accrue immediately. 

Once you've decided on a financial aid package, fill out any required paperwork and keep all your documents in a safe place. From there, sign up for any online sessions explaining your borrower responsibilities.

You'll also need to sign a Master Promissory Note if you choose to take out a loan. An MPN is a legal document you sign to promise to pay back your loan along with interest and fees. You'll also determine the amount of money you want to borrow and your repayment term. The government won't disburse your loan until you sign this document. 

You can generally expect your school to get your federal funds about 10 days before classes begin. You may experience a 30-day delay if you are both a first-year student and a first-time borrower.

Private student loans often come with higher interest rates and fewer protections for borrowers than federal student loans, but you may need to take them out if your federal options don't cover the cost of your school. 

You can find different applications for private student loans on lenders' websites. You'll probably need to provide similar financial and identification documents as you would on the FAFSA, though the requirements will vary by lender. 

Private lenders will run a credit check to figure out if you qualify for a loan, much like the federal government does with Direct PLUS Loans. Discuss details with your particular lender.

You can apply for a private student loan much more quickly than a federal student loan. You could get your rates and see whether you're approved for a loan within a few minutes with some businesses, and most companies will give you an approval decision within 15 minutes. 

If you want to know the status of your loan disbursement, you can usually check a lender's online portal or call customer service. You'll need to agree to terms similar to those in an MPN and sign a binding document.

Once you officially accept the loan, your college will likely get funds from a private lender within two to 10 weeks. You'll get the funds in your personal bank account if you take out a direct-to-consumer loan, while your school's financial aid office will get the money if you take out a school-certified loan. 

You can fill out the FAFSA before being accepted, but you'll need to add schools later to actually receive award letters.

Schools will usually disburse loans at the start of each semester, but timing can vary.

To get help with the application process, visit your school's financial aid office, the Federal Student Aid website , or your high school counselor.

Editorial Note: Any opinions, analyses, reviews, or recommendations expressed in this article are the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any card issuer. Read our editorial standards .

Please note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed, or may no longer be available.

**Enrollment required.

• Main content

• Search Search Please fill out this field.
• Career Planning
• Leaving a Job

Farewell Letter Examples to Say Goodbye to Colleagues

Tips for Writing a Farewell Letter

When to send your farewell email, what to include in your letter, review sample farewell messages, how to send an email farewell letter, farewell message subject lines, sample farewell email message, frequently asked questions (faqs).

When you're leaving your job, take the time to send a farewell email or letter to the colleagues you have worked with. This is a good idea for several reasons. It's a way to keep in touch with your soon-to-be former co-workers and a way to move on from a job gracefully and professionally.

It's always important to leave a job on good terms. The people you work with are a valuable part of your network and may be helpful contacts to have in the future. For example, your colleagues may be able to provide you with a reference , offer you some job leads if you are searching, or introduce you to someone else you might want to network with.

Along with all these reasons, saying goodbye is simply the polite thing to do.

Key Takeaways

• Regardless of the reason you're moving on, take the time to say goodbye to all the people who have supported you at work.
• Include your personal contact information in all the correspondence you send to make it easy for the recipients to stay in touch.
• Keep it concise: A couple of paragraphs is sufficient.

Review tips for how to write a farewell letter, what to include in it, what not to say, and when to send it. Also, review examples you can use as starting points for your own letters and email messages.

Melissa Ling / The Balance 

Timing is everything when it comes to quitting the right way . That includes letting your colleagues know you're leaving at the right time.

Be Sure Management Knows First

Before you let your colleagues know you're moving on, tell your boss and check to make sure everyone who needs to know is aware you have resigned. You don't want your manager to find out through the grapevine that you're leaving.

Send It Before You Leave

Send your email or letter a day or two before you leave. You want to give yourself and your colleagues enough time to say goodbye. However, do not send your letter until you’ve finished most of your work tasks. This will allow you to focus on saying goodbye during the final day or hours.

When writing your letter, be sure to: 

Personalize your message. Consider tailoring each letter to the individual person rather than sending out a group email to everyone. Address each person by name and, if possible, include an anecdote or other personal message reflecting on your time together. It will be more meaningful than sending a mass message.

Only send letters to people you have worked with. Especially if you work at a large company, you do not want to send a message to everyone (unless you worked with all of them).

Say thank you. This letter is your chance to express gratitude for any help or mentorship provided. You might also express how much you’ve enjoyed working with your colleagues.

Include your personal contact information. Provide information on how your colleagues can reach you once you leave. Include an email address (a non-work email) or your phone number. You might also include your LinkedIn profile address. Remember, you won't have access to your work email system once you've moved on.

Keep it positive. Again, the goal of the letter is to stay connected with your former co-workers; you do not want to leave a bad impression. Even if you're leaving on bad terms, you don't need to mention it to the people you worked with.

Keep it short. Write no more than a couple of paragraphs. Along with saying thank you and including your contact information, you might want to mention your plans for the future. However, beyond this, keep it short and to the point.

Start with a sample letter. You can use a sample farewell letter or email message to help you write your own goodbye note to co-workers. However, be sure to change the details of the message to fit your particular situation.

If you haven't already, connect with your co-workers on LinkedIn. This will help you stay connected after you leave.

Review sample farewell letters, email messages, and subject lines to let your colleagues know you're moving on.

I wanted to take a moment to let you know that I am leaving my position at ABC Corporation. I will be starting a new position at XYZ Company next month.

I have enjoyed my tenure here, and I appreciate having had the opportunity to work with you.

Thank you for the support, guidance, and encouragement you have provided to me during my time at ABC Corporation.

Even though I will miss my colleagues and the company, I am looking forward to this new challenge and to starting a new phase of my career.

Please keep in touch: I can be reached at my personal email address (samantha83@gmail2.com), on LinkedIn (linkedin.com/samanthasterling), or my cell phone (555-555-2222).

Thanks again for everything. I wish you all the best.

Yours truly,

It is often a good idea to send your letter via email. That way, your colleagues will receive the message quickly. This will also help you to easily tailor each message to fit the individual recipient.

When you send your farewell message by email, include your name and the reason you're writing in the subject line of the message to help ensure your email gets opened.

Here are examples of what you might write:

• Subject: FirstName LastName – Staying in Touch
• Subject: FirstName LastName Update
• Subject: FirstName – Moving On
• Subject: FirstName Update
• Subject: News From FirstName LastName
• Subject: Update From FirstName
• Subject: FirstName LastName — Farewell

If you know the person well, it's fine to include just your first name. Use your first and last name for recipients with whom you only have a professional relationship. If you're sending it out to a group, it's okay to use a subject line like "Farewell."

Subject: Tyrone Garrett – Update

Dear Linda,

I am writing to let you know that I am retiring at the end of the month.

I have so enjoyed working here these past 10 years. I am grateful for having had the chance to work alongside you. I will never forget your kindness and professionalism whenever we worked on team projects together.

My wife and I will be moving to Seattle in three months; however, I hope to keep in touch. You can reach me at my email address (tgarrett@email.com) or 555-555-5555.

Thank you again for a terrific 10 years. I wish you all the best and hope to stay in touch.

How do I politely quit my job?

When quitting your job, be sure to give appropriate notice, write a resignation letter containing the date of your departure and your thanks for the opportunity. Lastly, stay positive. Don’t badmouth your boss, co-workers, or clients on the way out the door.

Do I have to give two weeks’ notice?

Whenever possible, it’s best to give at least two weeks’ notice . However, if you can’t provide the standard notice, inform your manager as soon as possible. Write a resignation letter, just as you would if you gave two weeks’ notice, and include the date of your last day of work. 

• Kreyòl Ayisyen

CFPB v. Think Finance, LLC

We are the Consumer Financial Protection Bureau (CFPB), a federal government agency that enforces laws that protect consumers.

In 2017, the CFPB sued Think Finance, LLC and six subsidiaries (collectively, the “Think Finance Entities”). For years, the Think Finance Entities managed three lenders: Mobiloans, Great Plains Lending, and Plain Green Lending. The Bureau’s lawsuit alleged that these businesses deceived people and broke licensing and lending requirements. As a result, their loans in 17 states are considered illegal, void, and uncollectable, according to the Bureau’s lawsuit. The Bureau’s lawsuit also stated that the Think Finance Entities helped two debt collection companies illegally collect loans.

Victim compensation

The cfpb has contracted with epiq systems to administer payments for this case and answer consumers' questions. for questions related to this case, please:.

• Call: 1-888-557-1865
• Email: [email protected]
• Write: CFPB v. Think Finance, LLC, P.O. Box 5290, Portland, OR 97208-5290

Important dates

May 14th, 2024 – Ongoing: Distribution

More information about the case

Read the court order

Read the press release

View full size image

How long does it take to get a personal loan?

In a nutshell

Personal loans are a way to get cash relatively quickly. Depending on the lender, it’s possible to get funding within one to three business days.

• The process can be fast if you apply online, you already have your required documentation available and your credit score is above 680.
• It is possible to get a personal loan with a credit score below 680, but you may have to wait longer for the funds, and you will probably pay a higher interest rate.

Factors influencing loan approval time

Various factors influence how long it takes to get a personal loan. Understanding the timeline can help you decide when to apply and how to best manage the process.

Type of lender

Different lenders have different requirements for getting a personal loan. The fastest lenders are usually online lenders. They can approve your loan in minutes and, in some cases, deposit money in your account as early as the next business day. Some lenders even transfer the funds on the same day.

On the other hand, if you get a personal loan from a bank or credit union, you might need to go into a physical branch. It can take longer for the loan officer to review your documents, and funding might take up to a week or more.

How much documentation you need to provide

Some lenders use readily available information, such as your credit report and score, to make a decision. They might also require you to use a service like Plaid to provide bank account details. In these cases, you provide minimal documentation and rarely need to upload anything. This usually speeds up the process, helping you get your personal loan faster.

If a lender requires you to obtain bank account statements and upload PDFs, or if you need to offer additional information, such as tax returns and paystubs, it can take longer to get through the loan approval process.

Your credit situation

Many personal lenders check your credit report and credit score when evaluating you for a personal loan. If you have a high credit score, you’re more likely to be approved quickly and get your money faster.

There are personal loans for fair credit, but they might require more documentation. While some lenders make quick approval and funding decisions when you have poor or fair credit, some will want to get a better idea of your banking situation and verify that you’ll be able to make regular payments, which can delay the funds making it to your bank account.

How long it takes to get a personal loan

It’s fairly common to get a personal loan within a week. Depending on the lender, documentation and your credit, it might even be possible to get a personal loan the same day you apply. In many cases, though, you’re likely to go through the approval and funding process in one to three business days.

Requirements for a personal loan

Every lender has their own criteria for personal loans. Generally, though, you’ll need to meet the following requirements to get a personal loan:

• Be the age of majority in your state.
• Have legal status as a U.S. citizen or permanent resident.
• Have a bank account in good standing.
• Show that you have handled credit well in the past by having a fair to excellent credit score.

Tips to get a personal loan fast

You can speed up the approval process by being prepared. Here are some things you can do to reduce the time between when you apply for your loan and when the money arrives in your bank account.

Know your credit situation

Review your credit reports and check for errors. In some cases, mistakes on your credit report can bring your credit score down, reducing your chances of getting approved. If you find errors, fix them before you apply for a personal loan. You can apply to the credit scoring agencies to investigate any errors.

A consumer credit website can give you an idea of your credit score and potential red flags. Take a look at your debt-to-income ratio and your finances to make sure you can afford a personal loan. Figure out your cash flow so you know what payment date to request.

Have your documentation handy

You’ll typically need to provide some proof of your identity and income when you apply for a personal loan. Here are some items to have readily available before you start the process:

• Your Social Security number.
• A government-issued ID, such as a driver’s license or passport.
• Proof of your address, such as a utility bill.
• Proof of your income or finances, such as bank statements and/or paystubs.

When applying for a debt consolidation loan, get information on account numbers and the amount you owe or use loan statements.

Not every lender requires uploads of your documentation. In some cases, they connect to your other accounts or use other methods. Being prepared, though, can speed up the process.

Pre-qualification

Many lenders will pre-qualify you without a hard credit check. You’ll be able to gauge the likelihood of getting the amount you’ve applied for and what interest rate and terms you’ll be offered. Some websites can help you see several available loan offers.

Pre-qualification isn’t approval, however; you’ll have to go fill out a more thorough application and potentially provide documentation, as well as go through a hard credit check, to find out if you’re actually approved. Your interest rate and loan term might change as well.

Related: How to prequalify for a personal loan

One of the fastest ways to get a personal loan is to apply online. Many traditional banks and credit unions have online portals that allow you to fill out a loan application. Lenders that specialize in online loans can be even faster.

After you’ve applied, make a note of the customer service number so you can call if needed. Also, check your email, since you might be given additional directions via email.

Double-check your loan application

Typos and other mistakes can slow down your approval. Before you submit your application, review all your answers and make sure the information you provide is accurate. That way, you won’t waste time correcting the information on the application.

Types of fast loans to avoid

Not every personal loan is a good choice, even if you can get the money fast. Here are some types of loans to be wary of:

• Payday loans: You borrow a small amount of money fast for a flat fee. You’re supposed to pay it off on payday, but it’s easy to extend the loan for another two weeks by paying another fee, getting you stuck in a debt cycle and costing you a lot in interest and fees.
• Car title loans: These often have high APRs, and if you can’t make payments you could have your car repossessed.
• Online bad credit loans: Similar to payday loans, you might be able to get a bigger, faster loan if you use a lender specialized in bad credit. However, these loans usually require weekly payments and their APRs can be in the triple digits.
• Pawnshop loans: You use a valuable item as collateral and pay a fee. Fees can be high, and if you don’t repay the loan within the stated time period, you could lose your item.

The AP Buyline roundup

If you want fast cash with a personal loan, research ahead of time to verify that you’ll be able to afford the loan. Additionally, you can speed up the process by getting pre-qualified with online lenders and being ready with your documentation.

Frequently asked questions (FAQs)

How long can it take to get approved for a personal loan.

Approval times vary by lender, but it’s possible to get approval in as little as a few minutes when you apply online. If you need to go into a bank or credit union in person, it might take days or even a week (or longer) to get approved.

What credit score is needed for a personal loan?

There’s no set credit score for personal loans. Some lenders specialize in personal loans for fair credit or even bad credit . Generally, though, the higher your credit score, the easier it is to get approved for a personal loan and the better your terms will be.

How hard is it to get a personal loan?

How hard it is to get a personal loan depends on your credit and income situation, as well as the policies of the lender. It’s usually harder to get a personal loan if you already have a lot of debt or if your credit score is low.

Are personal loans easy to get approved?

Personal loans can be easy to get approved, depending on the online lender and your qualifications.

More From Forbes

When to finalize paying for college this year.

• Share to Facebook
• Share to Twitter
• Share to Linkedin

How to know when to actually pay for college this fall.

Navigating the upcoming 2024-25 academic year has been a challenge for families, at least when it comes to securing financial aid to help cover higher education costs.

Not only did a late rollout of the Free Application for Federal Student Aid set families back when it came to applying for aid in a timely manner, but information wasn't even released to schools until the first half of March. The U.S. Department of Education also announced in early April 2024 that as many as 30% of FAFSA forms are "potentially affected by known processing or data errors."

Delays with the FAFSA aside, you still have time to submit the form if you haven't already. The FAFSA deadline for the 2024-25 academic year isn't until June 30, 2025, although many schools and states have much earlier deadlines when it comes to accessing aid.

However, you should know that submitting the FAFSA after school starts this year can cause significant problems when it comes to qualifying for aid.

With that in mind, when should you be finalizing paying for college? Let’s dive in.

Why Is Chief Boden Leaving Chicago Fire Eamonn Walker s Exit Explained

‘reacher’ season 3 casts a villain that looks like he ate reacher, biden vs trump 2024 election polls biden leads trump by only single digits in new york latest survey shows, funding timelines for the 2024-25 academic year.

Even with all the challenges faced by families this year, by and large, there haven't been any broad announcements in terms of paying for college later than usual. Higher ed consultant Danilo Umali of Game Theory College Planners says that colleges still want their money as usual, typically before fall matriculation.

"The only delays we've seen is an extension beyond the informal May 1st decision deadline," he says.

Umali says that hasn't stopped colleges from pressuring families into an attendance decision by forcing a deposit on housing before the typical May 1 deadline. Unfortunately, this timeline makes zero sense for anyone still waiting on their complete financial aid packages from the colleges. Families shouldn't have to put down a deposit for housing when they have no idea how much aid their dependent will receive, or what their own out-of-pocket responsibility for college expenses will be.

Wealth advisor and college financial aid advisor Jack Wang of Innovative Advisory Group says that, generally speaking, fall semester or first quarterly bills typically go out to families over the summer months of June or July. This means bills are set to arrive in homes in short order, potentially even before families know how much aid they'll receive.

Wang says he typically counsels his clients not to pay the first bill without poring over the details since they are often incorrect.

"Aid may not show yet, or there may be other charges like student health insurance that need to be waived," he says.

This is typically okay since college tuition bills aren't usually due until August, right before school starts. However, you'll want to read over the bill you're sent to know the exact due date and avoid a late payment.

In the meantime, federal student loans open for the coming academic year in June. These loans are also awarded based on information submitted by families in the FAFSA form. So, this is another area where many are still waiting to hear.

Umali also points out that, when it comes to private student loans, many lenders won't approve applicants for financing without an award letter in hand. At that point, families can apply for private student loans to fill in funding gaps they have.

How To Catch Up For The 2024-25 Academic Year

Families who haven't taken steps to figure out how to pay for college this year (or where to attend) still have some time, but not a lot.

First, Umali points out that you may want to consider more schools than you normally would if you or your dependent haven't started applying for colleges yet. A range of colleges and universities have even extended their deadlines to apply for enrollment this year as well, many into June, July, or August.

"You may yet find some hidden gems here," he says.

Beyond applying for schools, those planning to attend college this year desperately need to fill out the FAFSA as soon as they can. This is the only pathway to qualify for federal student loans as well as other types of aid, including Pell Grants, work-study programs, and more.

Wang also says families need to consider if they should borrow to help cover college costs, whether they opt for a loan that's federal, private, or potentially even both. While federal student loans are best for college expenses since they come with access to protections like deferment and forbearance, as well as income-driven repayment plans like the new Saving On a Valuable Education (SAVE) plan , private student loans may also be required.

Those who have money stored in a 529 college savings plan also need to understand how disbursements work . For example, it may be possible to send the money directly to a school to help cover tuition and fees, or parents can take disbursements directly and cover these costs from the proceeds.

The Bottom Line

FAFSA failures and processing errors have made lining up funding for college this year complicated and slow, and many families are still left wondering how much they'll actually owe for the 2024-25 academic year when all is said and done.

According to Wang, those who stand to lose out the most in all of this are families who cannot afford to pay (or borrow) the prices colleges are charging for tuition, fees, and room and board.

"The magnitude of failure from the Department of Education is unlike anything we've seen," he says. A request for comment was emailed to ED on Tuesday and this post will be updated if the department responds.

Wang also points out that some lesser known but fantastic colleges may also suffer due to these delays, mostly because their lower enrollment yields rely on competitive awards to fill their seats.

"Without the financial data provided by the FAFSA, these colleges may fail to fill the seats they need to generate the revenue they need to survive,” he says.

• Editorial Standards
• Reprints & Permissions

Join The Conversation

One Community. Many Voices. Create a free account to share your thoughts. 

Forbes Community Guidelines

Our community is about connecting people through open and thoughtful conversations. We want our readers to share their views and exchange ideas and facts in a safe space.

In order to do so, please follow the posting rules in our site's  Terms of Service.   We've summarized some of those key rules below. Simply put, keep it civil.

Your post will be rejected if we notice that it seems to contain:

• False or intentionally out-of-context or misleading information
• Insults, profanity, incoherent, obscene or inflammatory language or threats of any kind
• Attacks on the identity of other commenters or the article's author
• Content that otherwise violates our site's  terms.

User accounts will be blocked if we notice or believe that users are engaged in:

• Continuous attempts to re-post comments that have been previously moderated/rejected
• Racist, sexist, homophobic or other discriminatory comments
• Attempts or tactics that put the site security at risk
• Actions that otherwise violate our site's  terms.

So, how can you be a power user?

• Stay on topic and share your insights
• Feel free to be clear and thoughtful to get your point across
• ‘Like’ or ‘Dislike’ to show your point of view.
• Protect your community.
• Use the report tool to alert us when someone breaks the rules.

Thanks for reading our community guidelines. Please read the full list of posting rules found in our site's  Terms of Service.