One of the most important aspects of a person's financial status is his credit report.
Check new design of our homepage! Late Payment Explanation Letter There are several different reasons why a borrower might fail to make timely payments to a lender. In such scenarios, it is prudent to write a letter to the creditor explaining the reasons of the delay.
If you have no clue about how such a letter is written, then scroll down and take a look at the sample provided to help you draft one yourself. Penlighten Staff Last Updated: May 31, There are several different occasions where borrowers fail to make timely payments of the loans that they have borrowed.
Late payments are also observed in case of credit cards and other debt instruments. There are some consequences of late payments, such as fines and additional interest.
An explanation letter is usually written in two scenarios, namely, a case where the payment is yet to be made, and the borrower asks for more time, and a case where the borrower has made the payment and is apologizing for the late payment. Framing an explanation letter can be a really difficult task, as the letter should signify a genuine reason for the late payment.
The basic motive of such a letter is to communicate to the lender the cause of the late payment. The letter must be of course, polite, short, and definite. The following are elements that you need to include in the letter.
The reason for the late payment and financial hardships that you have been suffering in the recent past should be included in the letter. Giving a complete, honest, and transparent account of facts is always helpful, and if the lender is a private lender, he might not even report the late payment to the credit reporting bureau, thereby safeguarding your credit rating and credit report for the time being.
You may also chalk out repayment strategies in order to convince the lender about your willingness to make a full and final repayment. Mentioning the date on which you shall be able to make the payment. You may also mention the total amount of your next payment, along with the late fee charges as well as the actual interest.
Here you may also resort to some facts such as your salary, or a payment that you are to receive, in order to convince the lender about the payment. Overall, if you are able to write a really good letter of explanation, you will be able to buy yourself more time, as the lender may not report the late payment, thereby preserving your credit rating.
An explanation letter is also a very good proof that you have informed the lender about your inability to pay, and can be useful in case if the lender initiates a foreclosure or a seizure of property.
Sample Late Payment Explanation Letter The following is an example of a letter of explanation, you may even use it as a template and modify it according to your requirements Your Name and Address.New Answer If you are referring to writing a letter say to a mortgage company to explain past derogatories on your credit report, just be honest.
Of course, the sympathy factor does come into play. Jan 20, · Letter of Explanation sample.
Wonderin. Senior Contributor Mark as New; Bookmark; Subscribe; Late payments dated 12/07 and 01/08 in regards to current ACME Credit Union (Auto loan) – I've been referring clients to this thread as an excellent example on how to write a letter of explanation, it is many years old but the format is.
How do You Write a Letter of Explanation for Late Payment? Framing an explanation letter can be a really difficult task, as the letter should signify a genuine reason for the late payment.
The basic motive of such a letter is to communicate to the lender the cause of the late payment. Jul 18, · A Letter of Explanation is a simple few lines giving an underwriter insight into something flagged in the file such as You don't need to write a novel.
For a bankruptcy, the lender only needs. When writing your letter of explanation, the magic formula is to just write a simple explanation, Halladay adds. For instance, tell the underwriter that a snow plow hit your mailbox, and you didn’t get the bill that showed up delinquent on your credit report.
Use this sample letter explaining late payments as a template for your formal letter of explanation. One of the most important aspects of a person's financial status is his credit report.
The credit score is especially vital if a large purchase, such as a home or vehicle, is upcoming.