There are times when we need financial aid in order to push through with our education, business ideas, or other personal projects or goals which require a huge amount of money for its realization. It is for this reason that lending companies have been existing ever since the days of old. Today, the primary step to be taken by someone who wants to borrow money from another individual or institution is to write a loan application letter.
If you are planning to craft an effective loan application letter, it would be easier for you to make one if you refer to the loan Application Letters available on this page. These templates are available in PDF and Word formats, thus making it easier for you to access and edit these should you deem it appropriate. Scroll down below to view our templates!
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The Loan Application Process
A loan is the act of borrowing a specific amount of money from an individual or an institution with the intent of paying such amount back. A loan is usually given after a loan contract has been signed. A loan contract contains all the terms and agreement regarding the loan. Both the parties (the lender and the borrower) usually negotiate the terms of the loan before sealing the contract.
- Prior to the loan contract, the borrower would send a loan application letter to the prospective lender in order to express his or her intent to ask for a loan.
- Afterward, when the lender has decided to consider the application for loan made by the borrower, the borrower and the lender would convene in order to negotiate the terms of the loan.
- First, the borrower is made to fill out a loan application form which is prepared by the lender. The aspects which are to be included in the loan application form are the following:
- The payment method, whether personal, through a check, online banking, etc.
- The number of times the payment is going to be made. There are various options. For example, the loan can be paid in one time, or it can be done in yearly or monthly installments.
- The amount of interest to be added on top of the loaned amount. The interest is the amount of money which is charged by the lender to the borrower on top of the amount which he/she has loaned.
- The assets (land, buildings, vehicles, or other properties) of the borrower which would serve as the collateral damage in case the borrower fails to make his/her payment on the time it is due.
Aside from loan application letters, we also have Membership Application Letters and Scholarship Application Letters which you can use for future needs. Simply click on their corresponding links.
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Things To Remember in Writing a Loan Application Letter
Here are some guidelines to help guide you in writing a effective loan application letter:
- Observe the proper rules on writing formal letters.
- State your intent to borrow a specific amount of money.
- Explain in detail the reason for borrowing money. It is important that you are offering a clear, honest, and transparent explanation as to how you intend to utilize the money you intend to borrow.
- Enumerate your assets and liabilities.
- State the time, date, manner, and method which you prefer to make your payment.
For more reference, download our templates on this page. If you have other application needs, simply check our Business templates on our website’s archives. You can also use our collections of Job Application Letters and Employment Application Letters should you decide to apply for a job instead.