How to fill out the Payoff Request Letter Templates? A payoff letter provides instructions on how to pay off a loan with a lump sum before the loan term ends.Learn how payoff letters work. This article outlines the fivestep process of making your final loan payment. Step 1: Request a payoff quote. A payoff letter shows the remaining balance on your mortgage, including fees, interest, etc. Learn more about what a payoff quote is and how to request one.