A loan is a sum of money borrowed and its expected to be paid back within a certain period of time with interest. There so many personal or businesses reasons that can make you require a loan. Many entrepreneurs may require it to expand or start a business while individuals may want to construct their own home. Read on for writing tips as well as a sample of loan application letter to a bank
If you belonging to a bank with a high credit score, you are likely to enjoy their many services including loans. Are you a client in a particular bank in need of a loan, but you do not know how to write an application letter to them? All you have to do is reading on the loan application letter sample together with tips to help you out.
Bank loan application letter formatting guide for all your financing needs
Loan application letter has a format and content that must be included on it to make it valid. Be sincere and clear when writing to increases your chances of approval for the loan. Keep in mind that you should address your letter to the right department of the bank that deals with loans. Some factors like a good business history will be required for a company loan to be approved. For the individuals a good credit score is enough for them to get approvals in most banks.
Here are tips to lead you before you start writing loan of application letter to bank manager.
- As an account holder of that particular bank, what your relationship with them?
- Why do you need the loan? This is what you letter should clearly answer.
- How much do you wish the bank to lend you? Well include it on your application letter.
- Show and prove your credit score with the bank and other institutions.
- A humble salutation/ regards is needed to end your letter.
Business loan application letter sample
There is too much that you will require writing to make your loan application business letter to the bank relevant. The more the bigger the business is, the more the lengthy the letter will be. Here is what to include to your letter. Generally, the format required when applying for a loan for your business is different than when applying for a personal. For a business loan, you must:
- Provide your business data
What kind of a business do you have? Well, state the business name as well as is its address, location, its phone numbers, and remember to describe its property like maybe the size. You can briefly describe the business neighborhood.
Describe your business from its profile, management team, marketing and production plan, to the business human resources management.
- Provide the business market analysis
State the target customers for your business clearly by indicating the gradual growth and your goal plans for the business in future.
- What will the business benefit from the loan?
Most businesses require the loan to expand their business. Right? This means that either the business is very established or developing, you might need the loan for a specific reason. State why the business needs the loan and what it will benefit from the loan given.
- An executive Summary is required
The length of the executive summary loan proposal should not be lengthy and it should be written last.
How will your business loan application letter content flow of your writing the loan request? Well, here is what to state:
- State the amount the business requires applying.
Be clear and realistic on how much loan your business needs. Keep in mind that you have to state why you need the loan and how it will benefit the business.
- How will you repay the business loan?
To prove that the business will be capable of paying the loan, you need to provide your business interest statements rate and cash flow projections.
- Collateral to pledge will also be required
You will need to at least provide 2 forms on how the repayments of the loan will be done. One will be for the cash flow that the business generates and the other one for the collateral to secure the loan.
Other documents required are the business financial statements, income projections, and also attach any document that will show the facts based on your loan request.
READ ALSO: Banks that give student loans in Ghana
Business loan application letter sample to your bank
City, State, Zip Code
Attn: Commercial loan request
Anita Designs is an established fashion industry for creating men and women pieces of African wear. The industry embarked its operations on May 10th 2016 from a humble beginning of creating only women dress pieces. It made good progress in that we were able to employ more designers. Its great success comes from the demand for the unique, attractive, trendy, and fashionable pieces that we sell in our boutiques.
Since we started the fashion industry, we have maintained an annual profit of not less than $800, 000. This because we are the only industry creating African wears in the area from Ankara fabric, Kente, Leso wears, Kitenge, and Aso Ebi .
The annual sales for the industry last year was $2, 487,199 . It was a good profit for the industry in that we needed to come up with how to increase sales. We thought of constructing more boutiques outside our area; employ more designers due to the great demand for fashionable African wears. The industry’s financial statements and projections are attached with the letter.
We started off the construction with the industry gained profits, but 2 of them are not yet completed. We as Anita Designs are kindly requesting you to approve our loan of $150,000 to assist us finish up with the constructions. The amount will be enough to accomplish our goal and the industry will expand and make more sales. Kindly consider our application for the request of the loan. We hope to get positive response.
Personal loan application letter sample
There so many personal reasons to require a bank loan. Maybe you want to renovate your home, to purchase your car’s spare parts, you need to organize a birthday party, baby shower or any other personal reason. Keep your letter brief, be sincere, and don’t beg for the loan. Before you start off with writing your personal loan application letter to bank, have in mind that the only content required is:
- How much of the loan you require.
- What you want to do with the loan.
- How will pay the loan.
- The letter should not be long.
Here is a sample of personal loan application letter
City, State, Zip Code
The banks’s address
City, State, Zip Code
Re: Personal Loan of $10, 000
Dear bank’s name,
I kindly request for a $10, 000 loan to cement my new home under construction. Am currently living on rental house that i pay on monthly bases a total of $257. I started off with the construction 3 months ago and I would love to cement it so that I can halt with the paying of house rent from the beginning of this coming month.
Am a client of this bank for 8 years now. I have a closed and an open account at your bank with a good credit history. Two years ago, you approved my personal loan request of $ 5 000, which I paid within the required period. Am university professor by profession at AWD University. Am hoping that my details for the loan request is more convincing for you to approve it.
I look forward for your feedback on my loan approval. Am reachable via my email address firstname.lastname@example.org or my cell phone number 872-589-9922. Thanks in advance.
Your Name (It should be printed)