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Loan Recovery Letter

Loan Recovery Letter Template for Nigeria

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Key Requirements PROMPT example:

Loan Recovery Letter

"I need a Loan Recovery Letter for a defaulted corporate loan of ���50 million secured against company assets, where the borrower has missed three consecutive payments since January 2025, with specific mention of our right to seize the collateral."

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Document background
The Loan Recovery Letter is a crucial document in Nigerian banking and lending operations, serving as a formal demand for payment from defaulting borrowers. It is typically issued after initial payment defaults and informal recovery attempts have been unsuccessful. The letter must comply with Nigerian banking regulations, particularly BOFIA 2020 and relevant debt recovery laws. It includes specific details about the loan default, outstanding amounts, payment requirements, and potential legal consequences. This document is often a prerequisite for legal action and demonstrates the lender's attempt to recover the debt through formal channels before pursuing litigation. The Loan Recovery Letter should be drafted carefully to ensure it meets all regulatory requirements while effectively communicating the demand for payment.
Suggested Sections

1. Letterhead and Date: Official letterhead of the lending institution and current date

2. Recipient Details: Full name and address of the debtor, including any reference numbers

3. Subject Line: Clear indication that this is a Loan Recovery Notice/Demand Letter

4. Loan Reference: Details of the original loan agreement including date, amount, and account numbers

5. Default Statement: Clear statement of the default situation and breach of loan terms

6. Outstanding Amount: Detailed breakdown of the outstanding amount including principal, interest, and any penalties

7. Demand for Payment: Formal demand for immediate payment with specific amount and deadline

8. Payment Instructions: Clear instructions on how and where to make the payment

9. Legal Consequences: Statement of legal actions that may be taken if payment is not received

10. Contact Information: Details of whom to contact for payment arrangements or queries

11. Signature Block: Authorized signatory details and position within the institution

Optional Sections

1. Previous Communications Reference: Reference to prior recovery attempts and communications, used when there have been previous recovery attempts

2. Settlement Offer: Proposed settlement terms or payment plan options, included when the institution is willing to negotiate

3. Collateral Notice: Reference to any collateral that may be seized, included when the loan is secured

4. Guarantor Notice: Notice to loan guarantors, included when there are guarantors involved

5. Good Faith Statement: Statement acknowledging any partial payments or communication attempts by the debtor, included when applicable

6. Regulatory Compliance Statement: Reference to relevant banking regulations and compliance statements, used for regulated institutional lenders

Suggested Schedules

1. Statement of Account: Detailed breakdown of the loan account showing all transactions, payments, interest charges, and current balance

2. Payment History: Record of all payments made and missed payments

3. Interest Calculation: Detailed calculation of interest and penalties applied

4. Original Loan Agreement: Copy of the original loan agreement referenced in the letter

5. Previous Correspondence: Copies of previous recovery attempts and communications

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈË°æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

alex.den.21@genieai.co
Relevant legal definitions






























Clauses




















Relevant Industries

Banking

Financial Services

Microfinance

Credit Unions

Commercial Lending

Consumer Finance

Asset Management

Debt Collection

Legal Services

Relevant Teams

Legal

Credit Risk

Collections

Compliance

Operations

Risk Management

Customer Service

Finance

Credit Administration

Loan Recovery

Documentation

Relevant Roles

Credit Manager

Loan Recovery Officer

Legal Counsel

Collections Manager

Risk Manager

Compliance Officer

Banking Operations Manager

Credit Risk Officer

Recovery Department Head

Account Manager

Debt Recovery Specialist

Banking Operations Director

Chief Risk Officer

Legal Manager

Financial Controller

Industries







Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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