While getting an education loan from banks is one process, the processes after the loan is sanctioned are a whole other thing. To get some things done, students have to write letters to the bank. These letters are called "Demand Letters".
Demand letters are the letters written by students to the bank (or sometimes to their university) to demand some work to be done. It is a formal way of letting the bank know of your concerns and requesting them to get it sorted.
Now, demand letters are written for a few purposes such as:
Demand letters are important as they also act as a means of communication between the borrower and the bank and help build a smooth rapport eliminating communication gaps or no communication at all and taking action on the borrower's demands.
These letters contain essential information about the loan. Some elements of demand letters are:
Now, let us see what types of demand letters are there and their purposes.
Demand letters can be written for various purposes and in this article, we have mentioned three types of demand letters. By understanding these different types of demand letters for an education loan, students will be able to determine which type best suits their needs and situation.
This letter is written to the bank manager by the applicant asking for the sanctioned loan amount to be disbursed into the student’s bank account or the university's account(if the university requests so). This can be for the first installment or any other installment of the loan amount.
The purpose of this letter is to request the university to provide a fee structure demand letter to show it to the bank and request to disburse the approved loan amount to the student's designated bank account. This letter acts as proof of the expenses that will need to be borne. It can be written once with all detailed expenses for the whole course or each semester depending on the guidelines of the university. It is through this letter the lenders disburse the amount for the students to use.
The letter mentioned is usually written by students to the bank if their loan disbursement has been delayed or denied. This letter is often written in the worst-case scenario when the student has exhausted all other options for resolving the issue.
The purpose of the letter of appeal is to inform the bank of the situation and to request that the disbursement of the loan be expedited or reconsidered. The letter should clearly explain the circumstances that led to the delay or denial of the loan disbursement, and provide any relevant documentation to support the student's case.
The above-mentioned types of demand letters are the mostly written ones. And as told above, these letters can be written for any demand that needs quick resolution.
In the next section, we have provided the formats of demand letters for your reference and to remove confusion about their structure. Keep in mind that demand letters can be written in the format of a formal letter with a requesting tone to it.