Letter of Agreement for Payment of Debt
I hope all is well with you. I am writing this letter in response to your request for approval of the loan. You will be glad to know that after a keen investigation of your case, our company has approved your loan of $[AMOUNT]. Following are the terms and conditions of the repayment. Kindly go through them thoroughly and write a letter of acknowledgment in response.
- The loan will be given to the debtor in one whole for 5 years.
- The loan will be repaid in 10 bi-annual installments.
- The duration of repayment can be extended to 2 years by giving additional 17 percent markup on the remaining amount.
- The markup rate on the approved loan is 21 percent.
- The interest rate on the approved loan will remain fixed for five years.
- Balloon payments are not allowed to repay the debt. However, the debtor can repay the loan all at once.
- The mode of payment will not be online. The debtor will be repaid in cash by visiting the company. Cheques are also not accepted.
- The payment plan and due dates are already shared with the debtor.
- If the debtor by any chance miss two consecutive installments, the company is liable to seize the product of guarantee (gold, house etc.)
- The company can cancel the agreement or change the clauses anytime.
Please read the above-mentioned clauses with great care. If you agree then you may visit our office to sign the agreement on Tuesday, 5th October 2021 at 4:00 pm. Looking forward to hearing from you soon.
As per our last telephonic discussion, I am writing this letter to inform you that your loan for $[X] has been approved by XYZ bank. At this stage, it is pertinent to share the terms of the agreement with you. Following are the three sections of conditions, kindly go through them.
Payment and Repayment Mode
- The loan will be electronically transferred to the bank account of the debtor. He/she can withdraw the amount as per his/her suitability.
- The mode of the re-payment will be at the convenience of the debtor. Cash, Cheques and online payments are accepted.
- Two balloon payments are allowed in the whole tenure for the ease of the debtor.
Duration and Markup Rates
- The loan will be given for the tenure of 2 years.
- Installments are to be paid every month on regular basis.
- Tenure cannot be extended. However, exceptional cases can be taken into consideration for an extension of 6 months on the condition that the debtor will pay 15 percent additional interest on the remaining amount of the loan.
- Markup rates are not fixed and will be revised bi-annually.
- The markup rate for the first 6 months will remain 25 percent.
- If the debtor fails to pay 3 consecutive monthly installments, the bank is liable to seize the property or product of guarantee.
- The bank can change or cancel the agreement anytime.
Please read the above-mentioned terms of agreement and write a letter of acknowledgment in response. Also, if you agree with all of the above clauses, kindly visit the bank on Monday, 4th October 2021 at 3:00 pm to sign the agreement. Please do not forget to bring the essential documents and original CNIC. I look forward to serving you.