The process of communication between the creditors and their debtors can be complicated, and has to be dealt with caution. For that purpose, in this article, you will come across a couple of sample letters to creditors, which will help you draft one for yourself.
Creditors are defined as people or organizations, to whom we owe money. They can be any person or organizations, to whom we owe something. Most of the time, they are lenders, like banking organizations, individual lenders, or credit card companies. In the case of business, they might also be our suppliers whom we haven’t yet paid. Many people feel very embarrassed and ashamed to write letters to them, announcing a late payment. However there is nothing to be ashamed of, as we are paying them a specific interest or a late fee as well.
In fact, many people tend to avoid the aspect of writing to them due to embarrassment. It is however advisable to have a very polite, periodic communication with them, as it has some genuine advantages and proves to be very effective to get out of financial trouble. It also helps us to have reasonable rates of interests and fines for late payment. On that note, take a look at the sample letters to creditors provided in the paragraphs below.
Advantages of Communication
- Communication with the lenders keeps them updated on your financial status. If you are in financial trouble and are maintaining a periodic communication with them, then you may also get some kinds of tips and hints or even advise from them, free of cost.
- Communication plays a very effective role in improving your relationship with the lenders, as faith and confidence about you starts building up in their minds. This proves to be favorable in many drastic financial conditions.
- Constant communication also stops the lender from taking any ruthless action, such as foreclosure or very heavy rates of interest or late payment fines.
- You can also include many other things, like your current financial status or the information about the due receipts, that you are about to receive.
- In cases where you need financial help, like a loan or an extension of the time period of the loan, your lenders (with whom you stayed in touch with) provide you with financial help. They will also never deny you credit facilities, if you approach them later on.
- Communication also does not affect your credit history in a negative manner.
Sample Letters to Creditors
The following are some of the examples that you can use as templates in order to communicate with your lenders. One of the most important aspect is to maintain a tone that is polite and assuring.
This type can be written to inform him about the payment that you cannot make at the moment, but are sure to make in a few days time.
I am one of your debtors, (mention name), with the account number (name your account number if it is a bank or a financial institute). On 22nd of August, I was expected to make a payment as an installation for the auto loan that I had borrowed (mention the scheme or code of the loan if any). However, I am finding myself in a difficult financial position. In the next month by the 7th, I am to receive my monthly salary. I shall forward you a payment, that would consist of the installment amount, interest and also the late payment fine, as soon as I get my salary. I plead you to bear with the situation. I assure you that this kind of trouble would not happen in the future.
(name accompanied by some personal details such as account number)
This type is often written by businessmen, when they deal with their suppliers and lenders.
Last month on the 10th of July, we entered into a contractual agreement, when you drew a bill against me (mention details and code of the bill) for the purchase of goods (mention consignment number) on a credit basis. I was expected to pay you the amount (mention the amount), by the 1st of the September. However, due to some personal losses, I find myself in such a financial condition where I cannot pay the amount. In the next month, I am to receive a payment that is due on the 5th. I shall forward you the amount immediately and shall also include the interest and the late fine, as agreed in the bill of exchange. I hope that you understand the situation.
Thank you for tolerating the inconvenience,
As mentioned above, the letter must be appropriately phrased, be polite and assure a certain payment. Mentioning assured income on your behalf always helps a lot.