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Debt Negotiation Letter

If a person or an institution takes a loan against a property, he or she is called a debtor. Loans are issued by financial companies like banks to the debtors by verifying several documents. Creditors and debtors play an important role in the finance industry.

If the debtor is not in a position to repay the loan installments, he or she can negotiate with the creditor and pay whatever is feasible. Since a request is placed in the letter, the tone of the letter should be polite.

The following tips will help you to write a debt negotiation letter.

1. As it is a formal letter, the language should be simple and easy to understand.

2. The letter should be short, precise and right up to the point.

3. You have to state how much you owe to the creditor and then inform how much you are willingto pay.

4. Specify the mode of mode of payment you want to pay.

Debt Negotiation Letter  Sample



Star enterprises,

45, Main Road,

Chembur Road,


Dear Sir,

I am a customer of your company for the last two years. I have taken a loan of Rs 2,00,000 on 25th September, 2011. I paid the initial five installments on time and made a couple of other payments in irregular installments.

Due to recession, my business incurred losses and I am not in a position to repay the complete loan amount at this point of time. I want to inform you that I can pay 50 percent of the loan amount now and the remaining amount by the end of next year. I shall pay an amount of Rs 1,00,000 in the form of a cheque within a couple of days.

I request the authorities to consider my case and accept the payment. I can meet your legal expert and seek his opinion as well in this regard.

Thanking you,


Yours Sincerely,

Narayana Murthy

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