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Loan Satisfaction Letter Template

Clearly confirm full repayment of a loan and release the borrower from further obligations in a single, organized letter.

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Loan Satisfaction Letter Template

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Loan Satisfaction Letter Template


[Sender (Lender) Name]
[Sender Business Name, if applicable]
[Street Address]
[City, State/Province, ZIP/Postal Code, Country]
Phone: [Phone Number]
Email: [Email Address]

[Date]

[Borrower Name]
[Borrower Business Name, if applicable]
[Street Address]
[City, State/Province, ZIP/Postal Code, Country]


1. Subject

Subject: Loan Satisfaction Letter – [Loan / Account Number]


2. Opening and Confirmation of Full Payment

Dear [Mr./Ms./Mx.] [Borrower Last Name] / [Borrower Full Name],

This letter confirms that the loan identified below has been paid in full and is now satisfied in our records. As of the payoff date shown below, no further payments are due under this loan.


3. Loan Identification

The satisfied loan is described as follows:

  • Lender: [Lender Name / Business Name]

  • Borrower: [Borrower Name / Business Name]

  • Type of Loan: [Personal Loan / Business Loan / Vehicle Loan / Other]

  • Loan Agreement / Note Date: [Original Loan Date]

  • Loan / Account Number: [Loan or Account Number]

  • Original Principal Amount: [Original Loan Amount]


4. Payoff and Current Balance

As of [Payoff Date], we have received all amounts required to satisfy the loan. Our records show:

  • Total Amount Received to Satisfy Loan: [Total Amount Received]

  • Remaining Principal Balance: [0.00]

  • Remaining Interest or Fees: [0.00]

Accordingly, the loan is paid in full and closed as of [Payoff Date].


5. Statement of No Further Obligations

Effective as of [Payoff Date], you have no further payment obligations to [Lender Name] under the loan described in this letter.

This satisfaction applies only to the specific loan identified in Section 3 and does not affect any other accounts, loans, or obligations you may have with us, which will continue according to their own terms.


6. Release of Security / Collateral (If Applicable)

If the above loan was secured by collateral (for example, a vehicle, equipment, or other property), our security interest in that collateral is considered satisfied in connection with this loan, subject to any additional documents that may be required by law or by registration authorities.

Collateral Description: [Vehicle / Property / Other]
Collateral Identifiers: [VIN / Serial Number / Title or Registration Details]

We will take reasonable steps, where required, to prepare and provide any lien release, reconveyance, or similar document necessary to reflect this satisfaction, in accordance with applicable law and normal processing times.


7. Records and Credit Reporting (If Applicable)

Our internal records have been updated to reflect that the above loan is paid in full and closed as of [Payoff Date].

If we report this loan to credit reporting agencies, we will report its status as satisfied or closed in the ordinary course of our reporting cycle, subject to applicable law and the practices of the credit reporting agencies. This letter does not guarantee any particular credit score or outcome.


8. Requests for Copies or Further Information

If you require additional documentation related to this loan — such as copies of the original loan agreement, payment history, or a separate lien release form — please contact us at:

  • Phone: [Customer Service or Contact Phone Number]

  • Email: [Customer Service or Contact Email Address]

  • Mailing Address: [Mailing Address]

Please include your name, Loan / Account Number, and a brief description of what you need.


9. Closing

We appreciate your cooperation and thank you for fulfilling your obligations under this loan.

Sincerely,

[Signature of Authorized Representative]
[Printed Name of Authorized Representative]
[Title]
[Name of Lender or Company]


Signatures

Lender / Creditor:
Signature: _______________________________
Printed Name: [Authorized Signer Name]
Title: [Title]
Date: [Date Signed]

Borrower Acknowledgment (optional):
Signature: _______________________________
Printed Name: [Borrower Full Name]
Date: [Date Signed]

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Learn more about

Loan Satisfaction Letter Template

Click below for detailed info on the template.
For quick answers, scroll below to see the FAQ.

Click below for detailed info on the template.
For quick answers, scroll below to see the FAQ.

LOAN SATISFACTION LETTER TEMPLATE FAQ


What is a Loan Satisfaction Letter?

A Loan Satisfaction Letter is a formal written confirmation from a lender stating that a borrower has repaid a loan in full. It usually confirms the payoff date, remaining balance of zero, and that no further payments are due under the loan.


Why is a Loan Satisfaction Letter important?

A written satisfaction letter gives the borrower clear proof that the loan has been fully paid and closed. It can help resolve future questions, support credit updates, and serve as evidence if any dispute arises about whether money is still owed.


When should a lender issue a Loan Satisfaction Letter?

A lender typically issues a Loan Satisfaction Letter after the final payment has cleared and the account shows a zero balance. It may also be used after an agreed settlement or payoff amount has been received that fully resolves the loan.


Does a Loan Satisfaction Letter release collateral or liens automatically?

Not always. For secured loans, additional documents — such as a lien release, reconveyance, or title release — may be required under local law to remove the lender’s security interest. This template includes optional language to confirm release of collateral if appropriate, but lenders should follow local procedures for recording lien releases.


Should a Loan Satisfaction Letter mention credit reporting?

Many borrowers want confirmation that their account will be updated as “paid” or “closed.” This template includes an optional paragraph stating that the lender will update its records and, if applicable, report the satisfied status to credit bureaus in the ordinary course, without making specific guarantees about credit scores.


Can AI Lawyer help me customize this Loan Satisfaction Letter?

Yes. AI Lawyer can help you adapt this Loan Satisfaction Letter template with your names, loan details, payoff date, and any collateral release language so you have a clear, professional letter ready to send to the borrower.

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