20 Best Loan Application Letter Samples | How to Write (Format)

Business Loan Application Letter Sample

Loan Application is the letter that helps the lender decide if the applicant is qualified for the loan.

Key Points to mention when writing a loan application:

Address to the right authority: Example: Your Manager or HR or Loan Officer

 Addressing any letter to the write party is crucial as it is the start point of a conversation in a formal way and you would want this to start in the right foot. Hence, find out who the application needs to be submitted to and address it to them.

Reason i.e. how the money will be spent: Asking for a sum of money without mentioning the reason will be too vague and will have a sense of uncertainty. The lender needs to know why you need the money in order to decide if the need is reasonable and if the money is going to a good use. Legality of the matter is also important as they would not want the money to be used for something illegal such as drugs, etc. Hence, any debtor would want to know if their money is used in a lawful manner.

Specify the loan amount: Once you have got a legitimate reason for the loan request, a specific amount needs to be quoted as this will help decide the lender if you have the borrowing capacity. That is, if your earnings will be sufficient to recover the repayment of the money borrowed. It also says if the money borrowed is reasonable for the reason of borrowing the money.

Present positive attributes about yourself to ensure you are trustworthy: This is a collateral you use for asking the loan. Your good behavior and positive work history is what you can offer to guarantee that the money will be repaid and on time.

Mention on how you intend the loan to be repaid: This depicts your intention of returning the money. This is crucial because it gives a full picture of the loan cycle.

Always provide the right information and be honest: Lending money is a risk in itself, hence, being factual and honest about the situation is very important to ensure you have a good credit history as well as honoring the whole process with respect. Anything beyond honesty, will be deemed fraud and it may have bad consequences.

Please see sample application below with key points underlined:


John Wright

The Manager

Administration Department

XYZ Co. Ltd.

Sub: Application for Loan to purchase a New Bicycle.

Dear Mr. Wright,

I would like to request you if you could please grant me a loan of $800 as a personal loan as I need to purchase a New Bicycle. I am in need of a new Bicycle as my old one is broke beyond repair and this is the mode of transport to commute to work. I do not have that amount of money in hand at the moment, hence, I was hoping if you could help me by lending me the money.

As you are aware that I have been with the company for the past 3 years and have proven myself to be a loyal and dedicated employee under your kind leadership, hence I believe you would consider me worthy of the loan.

As per company’s employee loan policy, you can suggest a repayment plan for me as per your discretion to be deducted from my salary.

Thanking you in advance and hoping to hearing from you soon.

Kind regards,

Kate Brea

Customer Service Officer

Administration Team

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