Loan letter: How to Write Loan Application Letter

A loan application letter is written to by an individual who requires finances to cater for a specified need. The lender uses the information in the letter to establish the eligibility of the applicant for the loan. In the letter, you should indicate the amount of money you require besides how you will spend the money. It’s essential to remember not all individuals who apply secure the loan.

Therefore, how can you make sure you craft the best letter? A sample or template is the best option to get an idea of the language to use and the format.

What to include in a loan application letter

  • Why you need the loan: When applying for a loan, you must include the reason for asking the loan in the letter. Describe how you will use the credit. The reason for the loan can determine if the lender will approve the loan or not.
  • Truthful information: False information might be the reason the lender will not approve your loan application. The loan application letter should only contain genuine details. Avoid the temptation of lying to your lender. Remember, these individuals can figure out if you are telling the truth or not.
  • Amount required: You can’t apply for a loan without stating the amount of money you need. Be specific in your demand. You must be reasonable when applying for a loan. You must explain in details how you will use the money.
  • Highlight how you will repay the money: The lender must understand if your present financial status can support repayment of the requested loan. No lender will approve a loan if the borrower doesn’t have a stable way of repaying the loan.
  • Address the letter to the right person: Before writing your letter, research to know whom to address the letter to. You need to know if you will address the letter to the bank branch manager, loan officer to your human resource manager.

Loan Application Letter Format










Subject: (…………………………..)

Dear (name/ title of recipient)

I have been an account holder in your bank for the past six years. Through this period I have maintained consistent cash flow in my account.

I am planning to take a loan of (amount) for (reason for the loan). I will repay the loan in a period (duration). Kindly find all the relevant documents attached to this letter as per your requirements.

In case you need more information, let me know. I will appreciate if you process the loan soonest.

I am thanking you for your assistance.

Yours truly



Sample Loan Letter/Email

Jeff RichPolaris, 1528 Gemini Place

Columbus OH, 43240

3rd March 2019

The Branch Manager

Century National Bank

Wal-Mart Supercenter

2850 Maple Avenue

Zanesville, OH 43701

Subject: Loan Application

Dear sir/madam

I have had a savings account with your bank for the last sixteen years. I want details for a mortgage loan to finance the process of acquiring a home for my family.

I work with the state department of health as a tax compliance officer. You can verify these details from my account.

Currently, I have already identified a house that is worth $90000, and I believe my current income can finance the project.

If you can send one of your sales representatives so we can discuss and agree on the finer details, I will be glad. I already have the relevant documentation in place.

I await a favorable response.


Jeff Rich

Types of loan letter

Business loan application letter

If you need a loan to start or expand your business, then you need to write a letter to your bank or any other financial institution to request for a loan. The lender will use the letter to gauge your creditworthiness before they can approve the loan. Remember to include these details in the letter;

  • Your annual revenue
  • Name and contacts of your business
  • Your business structure
  • Nature of your business

Loan application letter to bank

A loan application letter to a bank is written to ask for funding from the bank. The letter should be brief and bearing the relevant information. These are details you need to include;

  • Amount of money you need
  • How you will repay the debt
  • Why you require the loan
  • Your name and contact details

Loan request letter to an employer

Besides applying for a loan from your bank or other financial institution, you can also request a loan from your employer through a letter. When writing the letter, highlight these details;

  • Reason for the loan
  • Repayment terms
  • Your name and address
  • Amount needed

Housing loan letter

A housing loan letter is written to seek funding to purchase or finance the process of acquiring house/property. The letter must have the relevant information which includes;

  • Amount of money required
  • How you plan to repay the loan
  • The locations and size of the house
  • Contact details

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