Sample Letters to Creditors

Creditors are defined as people or organizations, to whom we owe money. Creditors can be any person or organizations, to whom we owe something. Most of the time, creditors are lenders, like banking organizations, individual lenders or credit card companies. In the case of business creditors, they might also be our suppliers whom we haven't yet paid.

Many people feel very embarrassed and ashamed to write letters to creditors, announcing a late payment. However there is nothing to be ashamed of, as we are paying the creditor a specific interest or a late fee as well. In fact, many people tend to avoid the aspect of writing a letter to the creditors. It is however advisable to have a very polite, periodic communication with the creditors. Communication with the creditors has some genuine advantages and proves to be very effective to get out of financial trouble. It also helps us to have reasonable rates of interests and fines for late payment.

Advantages of Communication with Creditors

• Communication with the creditors keeps the creditors updated on your financial status. If you are in financial trouble and are maintaining a periodic communication with the creditors, then you may also get some kinds of tips and hints or even advise from them, free of cost.
• Communication plays a very effective role in improving your relationship with the creditor, as faith and confidence about you starts building up in the creditor's mind. This proves to be favorable in many drastic financial conditions.
• Constant communication also stops the creditor from taking any ruthless action, such as foreclosure or very heavy rates of interest or late payment fines.
• You can also include many other things, like your current financial status or the information about the due receipts, that you are about to receive.
• In cases where you need financial help, like a loan or an extension of the time period of the loan, your creditors (with whom you stayed in touch with), provide you with financial help. These creditors will also never deny you credit facilities, if you approach them later on.
• Communication also does not affect your credit history in a negative manner.

Sample Letters to Creditors

The following are some of the sample letters that you can use as templates, in order to communicate with your creditors. One of the most important aspect of writing a letter to a creditor, is to maintain a tone that is polite and assuring.

Sample #1
This type of letter can be written to the creditor, to inform him about the payment that you cannot make at the moment, but are sure to make in a few days time.

Dear Sir,
I am one of your debtors, (mention name), with the account number (name your account number if it is a bank or a financial institute). On 22nd of August, I was expected to make a payment as an installation for the auto loan that I had borrowed (mention the scheme or code of the loan if any). However, I am finding myself in a difficult financial position. In the next month by the 7th, I am to receive my monthly salary. I shall forward you a payment, that would consist of the installment amount, interest and also the late payment fine, as soon as I get my salary. I plead you to bear with the situation. I assure you that this kind of trouble would not happen in the future.

Thanking you,

Yours truly,
(name accompanied by some personal details such as account number)

Sample #2
This type of letter is often written by businessmen, when they deal with their suppliers and lenders.

Dear Sir,
Last month on the 10th of July, we entered into a contractual agreement, when you drew a bill against me (mention details and code of the bill) for the purchase of goods (mention consignment number) on a credit basis. I was expected to pay you the amount (mention the amount), by the 1st of the September. However, due to some personal losses, I find myself in such a financial condition where I cannot pay the amount. In the next month, I am to receive a payment that is due on the 5th. I shall forward you the amount immediately and shall also include the interest and the late fine, as agreed in the bill of exchange. I hope that you understand the situation.

Thank you for tolerating the inconvenience,

Yours truly,
(name)

As mentioned above, the letter must be appropriately phrased, be polite and assure a certain payment. Mentioning assured income on your behalf always helps a lot.