Best Format Examples of Loan Application Letter in Nigeria

Best Format Examples of Loan Application Letter in Nigeria

Application for Loan: Do you need an application letter for a loan? An Application letter template that could be modified to suit the loan you’re applying for? or An application letter for any loan format? The loan application letter highlights your life as an individual, showing your achievements and skills and why you need a loan. Read through for more loan application formats.

Most of the time, a loan application in Nigeria stands out when you include an application letter expressing your interest in the company, stating your skills, competencies, experience, and shows the lender why you are the ideal potential person to get the loan.

What is a Loan Application Letter?

A Loan application letter is a formal document written to a potential employer or company to express your intentions as to why you need the loan.

The loan application letter highlights your life as an individual, showing your achievements and skills, helping to get the attention of the hiring manager or person responsible for reviewing applications.

This letter should be interesting enough to the manager, highlights the key qualifications that make you a fit for the loan creating thoughts in his heart to request an interview with you.

Points to Note When Writing a Loan Application

1. Address to the right authority:

Example: Your Manager, HR, or Loan Officer

You have to address any letter to the right party. It is very crucial as it is the start point of a conversation in a formal way and you would want this to start on the right foot. So always try to find out who the application needs to be submitted to and address it to them.

2. Reason for the Loan i.e. how the money will be spent:

Asking for a sum of money without mentioning the reason will be too vague and will have a sense of uncertainty.

The lender needs to know why you need the money in order to decide if the need is reasonable and if the money is going to good use.

The legality of the matter is also important as they would not want the money to be used for something illegal such as drugs, etc. Hence, any debtor would want to know if their money is used in a lawful manner.

3. Be Specific about the amount:

When you have got a legitimate reason for the loan request, a specific amount needs to be quoted as this will help decide the lender if you have the borrowing capacity.

That is if your earnings will be sufficient to recover the repayment of the money borrowed. It also says if the money borrowed is reasonable enough for the reason of borrowing the money.

4. Present positive attributes about yourself to ensure you are trustworthy:

Your good behaviour and positive work history are what you can offer to guarantee that the money, like some, sought collateral.

5. Mention how you intend the loan to be repaid:

This depicts your intention of returning the money. This is crucial because it gives a full picture of the loan cycle.

Provide the right information and be honest: Lending money is a risk in itself, hence, being factual and honest about the situation is very important to ensure you have a good credit history.

Loan Application Format and Content

The loan application letter format is generally six paragraphs long, with each major topic discussed in a separate paragraph.

The content includes the loan amount requested, a description of your business, the purpose of the loan, target market and competition, and the amount you have invested in your business.

Call the bank and ask for the name of the person who handles business loans and address the letter to that individual.

Loan Application Letter Sample

Business owners request loans for a variety of reasons. In this loan application letter sample, the owner of a decorating business is requesting a loan in the amount of $25,000.00 to expand her warehouse space.

She includes information regarding her business success to inspire interest in her loan application.

Dear Mr Brand,

I am requesting a business loan in the amount of $25,000.00 for the purpose of expanding my warehouse facilities. My business has experienced significant growth over the past two years.

This increase in business necessitates I expand my current warehouse facilities to accommodate a larger inventory.

I have significant experience in the home decorating business and I am considered an expert consultant in the industry.

My interior design plans have been featured in several national magazines, including Decorating Digest, Home Embellishments, and JeanAnn’s Town and Country Designs.

I started Lindon’s Home Decorating Services in 1995 and the company has earned a profit consistently year after year, even during the recent recession.

The market for this business is heavily dependent on the housing market and the health of the economy. Over the years, I have pursued and won major contracts with national hotels.

This steady stream of work protected my business during the recent recession.

Today, the housing market is improving rapidly and the projected growth exceeds prerecession numbers. In addition, sharp increases in the building supply market suggest a growing trend in home remodelling.

My customer list includes five large hotel chains and two large national corporations that provide my company with new work orders each month.

I utilize cost-effective marketing strategies that result in an average of 200 new orders every month from private homeowners.

To date, I have invested and recouped through profits of $200,000.00 of my own money. I intend to invest $50,000.00 of my own money for this specific project.

My collateral consists of business assets with a fair market value of $950,000.00 and personal assets valued at $550,000.00.

I am enclosing my business plan, which details the reasons for the loan request. You may contact me at (555)-555-5555 if you have any questions.

Iris Lindon

Ms. Iris Lindon

Chief Executive Officer

Lindon’s Home Decorating Services

Enclosure: Business Plan

To,

John Wright

The Manager

Administration Department

XYZ Co. Ltd.

Sub: Application for Loan to purchase a New Bicycle.

Dear Mr. Wright,

I would like to request you if you could please grant me a loan of $800 as a personal loan as I need to purchase a New Bicycle. Also, I am in need of a new Bicycle as my old one is broken beyond repair and this is the mode of transport to commute to work.

I do not have that amount of money in hand at the moment, hence, I was hoping if you could help me by lending me the money.

As you are aware that I have been with the company for the past 3 years and have proven me to be a loyal and dedicated employee under your kind leadership, hence I believe you would consider me worthy of the loan.

As per the company’s employee loan policy, you can suggest a repayment plan for me as per your discretion to be deducted from my salary.

Thanking you in advance and hoping to hear from you soon.

Kind regards,

Kate Brea

Customer Service Officer

Administration Team

Also Read – Query Letter Guide: Steps to Reply a Query Letter for Misconduct in an Office

Why You Need an Application Letter for a Job

For loans in Nigeria, an application letter serves as a formal introduction between you and your prospective lender, and in most cases helps you get ahead of other loan seekers giving your potential lender a reason why you are ahead of other applicants.

Nigeria which has a much more competitive circle in comparison with what happens when jobs are advertised with thousands of applicants showing interest, an applicant letter helps you stand out.

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