How to Write a Letter to a Creditor

How do you explain your side to a creditor? Creditors are persons or institutions from whom we owe something like money. They can be banks, credit card companies, a friend or someone you know. For businessmen, they can be suppliers who haven’t been paid yet. So why do you need to write to your creditors?

We do it to tell them that we might be late in paying your dues and obligations.

The Importance of Writing to a Creditor

Writing to our creditors is a very important so that we will not get into financial trouble. Constant communication with them helps give you fair rates of interest and fines whenever you pay your fines late. Letting the creditors know about your reason is a constant source of embarrassment for most people and avoidance seems to be the norm instead of an honest communication. But we must understand that it is nothing to be ashamed of, and that letting the creditors know your real situation has more advantages that just ignoring the fact that you have to let them know why you haven’t settled your dues yet.

What are the advantages of writing to your creditors? Your honesty would also keep their trust in you and if ever you become remiss of your obligations they would not right away take ruthless action against you. In case you ever find yourself in a financial trouble, and need help they can also come to your aid, and besides constant communication with will not have a negative effect in your credit history.

Now that we have settled the why, let’s move on to the how. How do we write a letter to our creditor? It is best to remember that when writing a letter to your creditors you must maintain a courteous and assuring tone. The letter should be formal and business-like.

How to Write the Letter

Let’s say that you have missed your deadline paying for your loan. How do you write a letter informing your creditor about that? Start your letter acknowledging that you cannot make the expected payment on time and details of the reason why you cannot make the payment. Ask the company for a chance and the time to pay back the creditor. Assure them that although you will be paying them not on the original date that you agreed on, you will still take care of your responsibilities. Set a specific date when you will pay your debts and make sure that you do so.

If you have missed several required payment schedules, you might have to send a different letter or letters depending on how the correspondence between you and your creditor goes. First you will have to send a letter to request for your outstanding balance, settlement figures and a copy of your agreement. Next you might have to send a letter offering for a continued payment and part of arrears. After that you can send a letter offering to reduced payment for a period.


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