How Do You Write a Payoff Letter?
A payoff letter is usually written by the lender, or legal representative of the lender, after a formal request is made by the borrower. Loan industry experts reveal that payoff letters provide details of the exact amount of money to be paid, when it is to be paid and how to pay it. Lenders may provide the letter free of charge or charge a nominal fee for the service, notes About.com
The payoff letter itself is simple and straightforward. However, the specific financial details of the loan are only accessible to the lender. Loan rates often fluctuate, which is why it is important to have the lender compile the final payment details in writing. The payoff letter reveals to the borrower the exact amount of money required to pay off the loan balance, according to legal advice site Nolo. This information includes the unpaid principle, interest and any related fees.