How to Write a Standard Application Letter for a Personal Loan

How to Write a Standard Application Letter for a Personal Loan
Writing an application letter for a personal loan can help increase your chances of approval.

How to Write a Standard Application Letter for a Personal Loan

Step 1

Consider the purpose of your loan. If the lender is requesting a standard application letter for your personal loan, he or she wants to know exactly what the loan will be used for. Lenders also want to be sure that the bank's money will not be used to illegitimate or illegal purposes. The purpose should be the first part of your letter--stating exactly how much the goods or services you require will cost. Be specific in your language and make sure to account for each dollar of your personal loan.

Step 2

In your standard application letter, be sure to include when you expect to pay the loan off. The lender wants you to commit to a date on which the loan will be fully repaid with interest. To figure this out, calculate your average monthly income--after taxes--and deduct all monthly expenses. Write your disposable income to the lender (after all your expenses are paid) to show you have enough income to carry the loan for the period you desire.

Step 3

Write a bit about yourself in your standard application letter for your personal loan. Do not go into great detail, but provide positive characteristics about your employment, personal history and past financial history, including any previous personal loans. Good things to include: a record of positive borrowing history, a long term of employment for one company or business, any volunteer work and academic excellence.

Step 4

Write the standard application letter in a professional, business-style structure. This means writing the lender's name and address at the top of the sheet on the top right margin, your name and address below the lender's on the left margin, a cordial greeting and a cordial exit (for example, "sincerely"). Make sure to date the letter as well for your records and the lender's. Keep a copy of the letter you send to the lender. Also, make sure to have a trusted friend or colleague copy edit the letter to ensure accuracy and clarity.