Loan Application Letter: 6 Simple Steps to Write

Learn how to write a compelling loan application letter in Nigeria with our step-by-step guide, tips, and free sample for fast loan approvals.

Nigeria is a country flourishing with a lot of business opportunities. Many businesses would thrive in many parts of Nigeria. Without saying, many entrepreneurs seek to exploit this gap and gain a competitive advantage. However, they are confronted with an issue: Capital!

Capital in itself isn’t necessarily the problem. However, how does one obtain this money from the hands of a lending organization? How do I craft a convincing loan application letter to lenders? Thanks to this article, you will learn the various steps in creating a loan application letter in Nigeria.

Loan Application Letter In Nigeria 

This section of the article discusses the steps in creating a loan application letter in Nigeria:

Step 1: Start With Basic Information About Yourself 

Just like any letter, you need to start with a brief introduction of yourself. As with the custom, start with your name and address. Later on, you can progress to include your contact address. After that, do well to write out your preferred lender’s details. These details should include the organization’s name or contact information. 

This information is usually on the left-hand side of the letter. In addition, it is recommended that you use Times New Roman writing fonts. This is because most lenders prefer this writing font. After all, it is comfortable to understand. 

Step 2: Heading 

Your heading should be precise. It should not be a mouthful. Instead, it should be straightforward. It should carry the essence and purpose of the letter. In this context, you are trying to borrow a loan. Often, people make the mistake of neglecting the loan amount in the header. It is wrong!

It is very important to include the loan amount in the heading. It helps the lender easily know the precise amount you want. Here is a simple way to write your letter header:

“Request For A Loan Amount For Capital [N50,000]”

Step 3: Purpose 

Now, you are at the body of your write-up. The next step is to show the lender you are interested in the loan. This section is meant for you to furnish the lender with the reason for the loan. In as much as you need the loan, keep the letter professional. Do not try to input informal language in your letter. 

You can outline the way you plan to use the funds. You can state your goals and objectives for obtaining the loan. 

During your letter, do not try to make any effort to be unduly familiar with the lender. For example, phrases like ‘How is your family?’ ‘How are the children?’ can be perceived to be irrelevant.

Step 4: Repayment Plans

You’ll agree that no lender wants to experience a bad debt. So, in your letter, try to assure the lending organization of your repayment. The only way you can do this is to express your repayment in your letter. How can you do this?

Try to include your payment strategies. To do this, you can narrate steps you would take in paying back immediately. Afterward, include your monthly, quarterly, or yearly payment plan. On the other hand, if you have a good standing with the organization, refer them to a previous loan you paid back. 

Another option is to include some of your assets that can serve as collateral. Many have found this option quite rewarding. The lending organization tries to get hold of something they can hold in case you do not pay. So, try to infuse this in your letter too. 

Step 5: Write on Your Credit Score 

Sometimes, lending organizations try to look at the history of borrowers before giving them loans. As highlighted in the previous step, try to mention your impressive credit score performance. Additionally, do not fail to suggest that the lenders remind you intermittently of your repayment. This action would help credit organizations to put their trust in you. 

On the other hand, it is better to leave this step out if you have a bad credit score. Instead of this, empathize with the reason you need the loan. 

Step 6: Conclude Professionally 

Your closing remarks should reassure instead of emotional. Reassure the lender of your willingness to pay. Do well to thank the organization as they consider your letter. At the bottom left corner of your letter, leave a signature and your full name. 

Loan Application Letter Sample

Obi Tobi

6, Ikeja, Lagos.

25-11-2024.

Olatunde Bami

Fintech Organization

34, Olatunde, VI.

Request For A Loan Amount Of N10,000

I want to bring up a matter of utmost concern. I am in financial difficulty and require your assistance in granting me a loan from your company. I am looking at the loan amount of N10,000, which I plan to pay over 12 months.

This loan request is due to some unforeseen personal circumstances that have resulted in significant financial strain. This loan will enable me to take care of the urgent costs without causing considerable disruption to my present financial standing or lifestyle.

I am more than willing to comply with the company’s terms concerning employee loans. I am open to discussing this further. Thank you in advance for your valuable time and consideration.

Sincerely,

Obi Tobi 

Signature.

_________

Conclusion 

To conclude, loan application letters are easy to write. They are one of the most concise types of letters to write. They usually take just one page at most. Remember, try to keep your letter professional!