Personal Loan Commitment Letter Sample

By | January 14, 2015

A personal loan commitment letter is issued by the lender once a loan application is approved. The lender declares that he / she will indeed give you a loan amounting to a certain figure and for a certain period of time. Some terms and conditions are charted out in a personal loan commitment letter – these letters are usually very long even but can be shortened to keep things more understandable.

So why are loan commitment letters issued if loan approval has already taken place? A loan commitment letter is issued for one reason – to help the borrower understand how loans work. These letters go into much detail about how much needs to be paid back, interest rates and what penalties a borrower will be subjected to in case there are failed or late payments.

Personal loan commitment letters are not legally binding – they are not contracts that both parties need to sign however, they can be deemed the next step after a letter of intent. They clearly chart out the terms and conditions upon which a loan is being given and may have actual personal loan agreements enclosed with them. The format on which these are written is usually determined by the lender so they may hold a very formal tone or one that borders between casual and formal.

Refer below for a sample personal loan commitment letter:

Personal Loan Commitment Letter Sample

January 14, 2015

Jackie Josef
6273 Main Street
Pittsfield, NH 15343

Subject: Loan Commitment

Dear Mr. Josef:

We would like to congratulate you on the approval of the personal loan that you applied from Stearns Lending under file number JJ-SL-524399. Please refer below for details of the loan:

Loan Amount: $5000
Loan Term: 24 months
Fixed Interest Rate for First 6 Months: 10%
Total Payable Amount: $5500
Monthly Installments between February 2015 and August 2015: $229.16

Please read the following terms and conditions carefully:
• The approved loan amount is fixed and cannot be changed under any circumstances
• The borrower must pay back the entire approved loan amount within the loan term specified in this letter
• Interest rate is subject to change after the first 6 months but will remain fixed until 6 months’ payments have been received
• All installments must be paid in equal amounts through checks, by the 15th of each month at the very latest
• Late payment charges will be posted to the borrower’s account at the discretion of the lender and will be undisputable

Please find 2 copies of the personal loan agreement enclosed with this letter. We would appreciate it if you would sign one copy and return to us as soon as possible. You may retain the other for your reference.

We thank you for your business and anticipate a lasting business relationship with you in future as well.



Caleb Carter
Loan Officer
Stearns Lending
2635 Joy Street
Pittsfield, NH 99728
Tel: (666) 666-6666