Loan Application Letter

Loan Application Letter

In writing a Loan Application Letter letter to the bank, you should point out the reasonable ground. It may include

  • Procurement of fresh stock for festivals
  • Renovation of the business centre
  • To overcome sudden loss due to flood or fire
  • Opening a new business/ manufacturing unit
  • To meet temporary/ speculative demand for money
  • To arrange for a supply against an order demanding huge investment

Loan Application Letter


Loan Application Letter #1


Write a letter to the branch manager of a bank requesting her/him to sanction a loan of Rs. 50,000/- for procuring fresh stock for the festive season.

NEW GARMENTS
B. T. Road
Sodepur, North 24 Parganas
Ref No.: Loan/02/14 September 10, 2021

The Manager
United Bank of India
Sodepur Branch, Sodepur,
North 24 Parganas

Sub: Request for sanctioning a loan of Rs 50,000/- for procuring fresh stock

Sir,
With due respect, I, a bona fide customer of your branch, beg to state that I started my business in 2013 with a bank loan of Rs 40,000/- from your branch and repaid it within a stipulated time limit. With your help, I have established myself and my business concern as a favorite destination to a lot of people.

But my present stock can no longer satisfy my customers, especially during marketing for Durga Puja and other festivals. I cannot cope with the growing demands and changes in fashion because of the shortage of funds. Our biggest festival, the Durga Puja is knocking at the door. This year the demand for a wide variety of readymade garments is expected to rise considerably. To meet the growing demand for new varieties, I am in want of your financial assistance.

In these circumstances, if you favor me by sanctioning a loan of Rs 50,000/-, I would be able to serve my customers better and keep up the reputation of my business concern. Past records regarding my repayment of the previous loan would testify to my credibility as a businessman and loanee.

Hope you would consider my application for the said loan and sanction the loan at your earliest.

Thank you.
Yours faithfully,
Pulak Pandit (Proprietor)
New Garments


Loan Application Letter #2


Write a letter to the bank requesting a loan for a manufacturing unit.

SUPERDOX PAPER MILLS LTD.
25, B. T. Road
Kolkata – 700123
Ref No.: Appl-Loan/2/14 January 10, 2021

The Manager
State Bank of India
Agarpara Branch
Kolkata – 700112

Sub: Seeking loan of Rs. 20 lakhs for a new manufacturing unit

Sir,

As directed by the Board of Directors, I am writing this letter is to request you for a loan of Rs 20 lakhs for a period of ten years on your usual terms and conditions.

The Board, in its meeting on January 2, has approved a project of opening a new manufacturing unit to meet the growing demand for our products. The cost, as estimated, is likely to be Rs 40 lakhs. We hope to raise Rs 20 lakhs from the advances made by our customers. The balance Rs. 20 lakhs is proposed to be raised through a bank loan. With the completion of the new unit, our position will be substantially improved to repay the loan without affecting our normal operation.

As we have been enjoying enduring association with your branch, we hope you will accommodate us with this loan. We are ready to hypothecate the new unit worth Rs. 40 lakhs as security for the loan Looking forward to hearing a favorable response from you at an early date.

Thank you.
Yours faithfully,
S. Kundu
(General Manager)
Superdox Paper Mills Ltd.

Enclosure:

  • A copy of the project for the new manufacturing unit
  • A copy of the resolution adopted in the meeting of the Board of Directors

Loan Application Letter #3


Write a reply from the bank to the above letter agreeing to lend the amount asked for.

STATE BANK OF INDIA
Agarapara Branch
Kolkata – 700112
Ref. No.: Loan/122/21 January 25, 2021

S. Kundu
General Manager
SUPERDOX PAPER MILLS LTD.
25, B. T. Road,
Kolkata – 700123

Sub: Your application for a loan for a new manufacturing unit

Ref.: No. Your Letter No. Appl-Loan/2/21 dated 10th January 2021

Sir,
We have received your application for a loan for developing a new manufacturing unit. As your company is one of our valued customers has a long-standing relationship and regular transactions with our branch, our bank is ready to process your application on usual terms and conditions. Our terms and conditions include the following points:

  • Repayment should be made within ten years by depositing EMI on monthly basis.
  • The interest rate for the first two years is 14% per annum. However, the interest rate may change from time to time at the sole discretion of the bank.
  • Non-refundable processing fee of Rs 10,000/- (Rupees Ten Thousand only) is to be paid within seven days from the date of the issue of this letter.
  • On the satisfactory report of the site inspection and documentation, the loan will be sanctioned.
  • The sanctioned loan will be disbursed in three installments.
  • The utilization certificate for each installment is to be produced before applying for the next installment.
  • A penalty will be charged for early repayment or delay in repaying EMI.
  • The first installment of the loan would be disbursed only after the hypothecation of your manufacturing unit.

If our terms are acceptable to you, please deposit the non-refundable processing fee and inform us so that the necessary formality for sanctioning the said loan may be started without delay.

We await your early response and assure you of our best services.

Thank you.
Yours faithfully,
for State Bank of India
Agarpara Branch
Amit Sen (Manager)


Loan Application Letter #4


Write a letter to a customer in reply to a request for a loan against Life Insurance Policy.

UNITED BANK OF INDIA
Jalangi Branch
Jalangi, Murshidabad
Ref. No.: Loan/143/21
January 24, 2021

Md. Akbar Shaikh
Madhyapara,
Jalangi, Murshidabad

Sub: Your application for a loan of Rs 15000/-

Dear Sir,
I have received your letter dated 16th January 2021, requesting an advance against your Life Insurance Policy. I am glad to inform you that on considering your long association with us, the bank is willing to process your application for a loan. But we have some limitations. As per the existing policy of the bank, we can consider the loan amount up to 75% of the surrender value of your Life Insurance Policy. Our terms and conditions would be:

  • The loan is to be repaid in 60 installments.
  • The rate of interest would be 12%. However, the rate may change from time to time.
  • You will have to submit a certificate from the Life Insurance Corporation fixing the surrender value of your policy.
  • You will have to assign the policy to us by way of a mortgage.

If you do agree to accept our terms and conditions, please obtain a certificate from the Life Insurance Corporation fixing the surrender value of your policy and contact us so that your application for an advance can be processed as expeditiously as possible.

Hope you will appreciate that we have to observe certain formalities while processing your application.

Thank you.
Yours faithfully,
On behalf of
United Bank of India
Jalangi Branch
Dipak Samanta (Manager)


Loan Application Letter #5


Write a letter requesting a bank for increasing the overdraft limit. You may mention the following points- 1. the necessity of holding of stocks of raw materials and finished products 2. uptrend in prices 3. readiness to provide additional securities

PAUL JEWELLERS
Thana Road
Karimpur, Nadia
Ref. No.: Let/Bank/112/21 January 12, 2021

Branch Manager
Union Bank
College Road
Karimpur, Nadia

Sub: Request for an increase of overdraft limit With due respect, I beg to bring to your kind notice the following facts for favorable consideration.

Dear Sir,
I have been your customer for the last ten years. My transaction with you will testify to the growth of my business in the last ten years. My business concern has already become а favorite destination to people in and around Karimpur on all occasions. Customers of today demand various types of hall-mark products, especially during festive seasons. So we should have a good stock of products to satisfy our customers. But the price of gold is soaring up. My working capital is not enough to serve my customers better.

At present, we have to increase our holding of stocks and raw materials to meet the extensive demand. The cost of production is also steadily increasing with the spiraling effect of an increase in the prices of other goods.

Under these circumstances, I request you to be kind enough to increase the overdraft limit from Rs 80,000/- to 1,75,000/- with effect from February 1, 2021, to enable me to overcome the financial difficulties that I have been facing now. I would like to intimate you that I am ready to provide additional security proportionate to the increase of the limit of overdraft.

I expect you will be kind enough to grant my request. Looking forward to hearing from you very shortly.

Thank you.
Yours faithfully,
Rathin Paul
(Proprietor)
Paul Jewellers


Loan Application Letter #6


Write a letter to a customer in reply to a request for a loan against a policy.

UNITED BANK OF INDIA
Jalangi Branch
Jalangi, Murshidabad
Ref. No.: Loan/145/21
January 27, 2021

Atul Mandal
Mandal para,
Jalangi
Murshidabad

Sub: Your application for a loan of Rs 10,000/-

Dear Sir,
I have received your letter dated January 17, 2021, requesting an advance against your market-based policy.

I regret to inform you that we cannot process your application for a loan for such a market-based policy since it has no fixed surrender or maturity value. Without having any collateral security we, no circumstances, can sanction this sort of loan.

However, we can sanction you the loan against fixed deposits of equal value, subject to your fulfilling other terms and conditions. So, to have the loan against your market-based policy, you may open a fixed deposit account of the same amount as your loan demand.

Hope you will appreciate our limitations.

Thank You.

Yours faithfully,
On behalf of
United Bank of India
Jalangi Branch
Dipak Samanta (Manager)


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