5 Best Loan Application Letter Format In Nigeria-If you want to get a loan and you are looking for the format to use to write your loan application, then you have stopped at the right place as we are going to show you how to write a loan application letter so that your loan application will be accepted.
A loan application letter has a lot of important details about you that will show your creditworthiness which can either increase your chances of getting the loan or reduce it.
Your loan application letter can stand out if it is one that includes your interest in the company, stating your skills, experience and competencies and shows the lender why you are the ideal person to get the loan.
So without further delay, let’s show you how to write a good loan application letter.
What Is A Loan Application Letter?
This is a formal document that a borrower writes and submits to a prospective lender with the intent of getting a loan.
The letter explains the borrower’s request for loan, the amount of loan requested, the reason for the loan and also an explanation on why the lender should consider the applicant’s loan request. The letter also tells how the applicant intends to repay the loan.
Requesting for loan is not a bad thing especially when you are faced with some life challenges, personal and emergencies needs, expand your current business or take advantage of your current market opportunity.
Regardless of reason for wanting to get a loan, there are different lending options for you to choose from and you might spend more or less time and effort applying for a loan depending on which lending options you decide to pursue.
What You Should Know When Writing A Loan Application Letter
When writing a loan application letter, there are some points you should take note of and they are:
· Address of the right authority
Your application letter should be addressed to the right person or party as it is very important when starting a conversation especially in a formal way. Always try to find out who the application letter is to be submitted to and address the letter to them.
So it could be to the Human Resource Manager or the loan officer.
· Reason for the loan
Before you will be giving any loan or before your loan application will be approved, you must mention the reason you want to take the loan.
You should make sure your reason is to too vague and unnecessary as the lender wants to the see the urgency and great need for the loan as this plays a role in determining your creditworthiness.
The lender needs to know if the need is reasonable and if you are going to put the money to good use. ~Best Loan Application Letter Format In Nigeria~
Also, they would want to be sure that what you want to use the money for is legal as no lender would want to be associated with illegal activities.
· Be specific with the amount you want
When you have a pressing need and reasonable reason to request for a loan, you will need to be specific with the amount you want to collect as this will help the lender know if you have the borrowing capacity.
This will help the lender know if your earnings will be sufficient to recover the repayment of the money borrowed.
· Attributes about yourself that makes you trustworthy
Some lenders might require you to state your positive attributes as these play a role in determining your creditworthiness. You will need to talk about your positive work history and some good behaviour.
· Mention how you intend to repay the loan
Here, you will have to show how you intend repaying the loan. This is very important as a lot of lenders will use this to determine if you are creditworthy.
You will have to provide the information and also be honest: lending money is a risk in itself and the opportunity cost of lending that money to you is the other thing the lender was supposed to use the money to do.
Ensure that you have a good credit history.
Loan Application Letter Format And Content
Generally, a loan application letter is not supposed to be too long as it should have about five to six paragraphs with each major topic discussed in a separate paragraph.
The contents include a description of your business, the amount you have invested in your business, the purpose of the loan, the loan amount requested and the target market and competition.
Try to find out the name of the person that handles business loans and address the letter to that person.
Loan Application Letter Sample
If you want to collect a business loan, you will have to be very “straight to the point”.
· Business Loan Application Letter Sample
In this loan application letter sample we will be talking about here, the owner of a furniture business is requesting a loan in the amount of N20 million to expand his warehouse and some other parts of his business.
He includes information regarding the business success to help increase her chances of getting her loan application approved.
Dear Mr John,
I am requesting a business loan of about N20 million to help me expand my business most especially my warehouse facilities. In the last two years, my business has experienced a major boost which has made us see reasons for an expansion.
I have a huge experience in the furniture business and when it comes to the industry, I am considered an expert and also a top marketer.
I started the Charles Furniture Homes in 2000 and the company has earned profit consistently since its establishment till date although there have been some ups and downs which is normal with all businesses.
The market for this business depends on the housing market of the economy and we have has a lot of clients that give good reviews about our products.
In recent years, the housing market is improving greatly and the projected growth exceeds the numbers prior to recession. So we are doing our best to meet up with the growing demand for furniture as new design are coming up and we always want to be ahead in the market.
I utilized cost-effective marketing strategies that result in an average of 200 new orders every month from private homeowners.
So far, I have invested about N15 million of my own money and my collateral consist of business assets with a fair market value of N40 million and personal assets valued at N25 million.
I am disclosing my business plan which shows in details the reasons for the loan request. You can contact me on 01 647 7453 if there are any questions.
Mr. Charles Mark
Chief Executive Officer
Charles Furniture Homes
Enclosure: Business Plan ~Best Loan Application Letter Format In Nigeria~
· Personal Loan Application Letter Sample
Mr Emmanuel David
XYZ Co. Ltd.
Sub: Application for Loan to pay up children school fees.
Dear Mr David,
I am writing this to request if you could please grant me a personal loan of N100,000 to enable me pay up my children school fees. I was supposed to have paid up their fees before now but some other unplanned events came up and we had to meet them.
This led to the reduction of the money for the fees and I was hoping I could get a loan from your to enable me paid up their fees.
It is no news that I have been with the company for over three years now and I have shown to be a loyal and dedicated employee to the organization and so I believe you could consider my request for the loan and grant we worthy of getting the loan.
You can use your discretion to determine and suggest a repayment plan for me as an employee of this organization.
Thanks in anticipation as I hope to hear from you soon.
Customer Service Officer
Sample Plot Loan From a Company
Request For Loan From Company Sample
Personal Loan Application Letter Sample
For whichever type of loan you want to take, we have given you a format that you can use to write yours. if you really want your loan application to be approved, you will have to take your time to write a loan application letter that will capture the attention of the lender and make them see reasons they should grant your loan request. ~Best Loan Application Letter Format In Nigeria~
The format and samples are just guides on how to write a loan application letter. Using the format or sample doesn’t guarantee that you would be granted your loan request as lenders look at some other factors in order to determine your creditworthiness.