How to Draft a Letter Requesting a Personal Loan From an Individual

How to Draft a Letter Requesting a Personal Loan From an Individual
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People often need a leg up financially. Whether for business or personal reasons, sometimes the only way to secure more money is to ask someone for a loan. Asking for a loan involves putting yourself in a vulnerable position. The loan letter reveals that you need money and you need it soon. A well-crafted letter, however, leaves the reader understanding your financial position and seeing that the help is temporary. Write loan proposals individually; do not use a blanket letter for each person you ask.

Personalize the letter. Use background history between you and the potential lender to break the ice and make it clear that the letter is written personally to that person and not a form letter being sent all over town. Briefly explain in the introduction why you believe this particular individual is the person who can best help you out.

Ask for a specific amount of money and explain, in detail, what the money will be used for. After flattering the individual in your opening, get down to business and state how much money you are seeking.

Discuss how you intend to repay the loan, at what interest rate and on what time line. Leave room for negotiation, because the person may be willing to lend you the money for a higher interest rate or a quicker repayment period.

Thank the person for his time and close by stating when you intend to contact him in person. Sign the letter.