Better Guide to Bank Loan Cancellation Letter

Sometimes people apply for a loan from the bank and…

Sometimes people apply for a loan from the bank and then decide to cancel the request due to personal or professional reasons. You would likely need to properly notify your bank in writing if you decided you no longer needed a loan.

Therefore, you must write a loan cancellation request letter to the bank. This article discusses how to properly compose a loan cancellation letter and the procedure of canceling a loan.

What Is a Loan Cancellation Letter?

A loan cancellation letter is a written document in which a borrower requests to withdraw their loan application. Many people need to ask for the cancellation of a loan application at some point due to various reasons.

For example, you may apply for loans from many lending organizations and pick the best deal. In such cases, you need to write a loan cancellation letter to the lenders you don’t want to use.

A man writing on a paper placed over a black table
Photo by Scott Graham on Unsplash

The Process of Canceling a Loan Application

If you wish to cancel a loan application, you must send a loan cancellation letter addressing your concerns to the lender. This process can vary based on the type of loan being canceled and the lender’s policies. The steps outlined below are basic guidelines for withdrawing a loan application.

Talk to the lender

You must call the lender as soon as you decide you do not want the loan. And let them know you want to withdraw your application. Check the cancellation charges as well.

Ask for cancellation forms

Request any necessary cancellation forms during your conversation with the lender. This is the step where you officially request the cancellation of the loans. Certain lenders want a form to be filled up for cancellation requests.

Compose a formal letter

Your letter should be written in a formal tone and manner. Make sure your letter contains all the relevant information. You must state your reason for canceling the loan application and what is holding you back from being able to complete the application. Don’t handwrite your letter; instead, print it.

Fill out the cancellation forms

Fill out any necessary loan cancellation forms, then send them along with your letter. Send your letter and the completed forms via certified mail so that you can track their delivery to the lender.

Call the lender for confirmation

You should wait at least a week before calling the lender again for confirmation. You can call the lender a week after sending the letter to be sure your cancellation request has been processed.

Loan Cancellation Request Letter Template

A loan cancellation letter or application may be written for various types of loans. Here’s a template of a loan cancellation request letter for you:

[your name]

[your address]

[date]

[recipient name]

[lending institution name]

[lending institution address]

Dear [name],

I’m writing to formally request you cancel my loan application [number]. I submitted this application on [date] with [loan institution name]. I am aware that my application money is non-refundable and that there [may or may not] be a cancellation fee. I’ve enclosed a check with the [check number] and the amount [amount] to cover the cancellation fee. You’ll also find the cancellation forms you requested enclosed.

[Describe your reasons for withdrawing the loan application.]

Please return the documentation I sent with my loan application as soon as possible. If you have any questions, please get in touch with me at [phone number] or [email address].

Sincerely,

[your signature]

{your name as listed on the loan application}

Conclusion

A loan cancellation letter is typically used to cancel a bank loan application that was submitted. This letter is used to request a lender to cancel the terms of a loan transaction.

It is due to a change in circumstance that warrants the termination of the loan in question. This article outlines the process of loan cancellation along with a sample template to help you write a formal loan cancellation letter.

Better Guide to Bank Loan Cancellation Letter

Abir is a data analyst and researcher. Among her interests are artificial intelligence, machine learning, and natural language processing. As a humanitarian and educator, she actively supports women in tech and promotes diversity.

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