Creating a payoff letter is essential to any loan or mortgage repayment process. Our free templates and this guide can help you get started.A mortgage payoff letter can come in two forms. One form tells borrowers the remaining principal amount and interest they have to pay to close out the loan. Create a Loan Payoff Letter online and download it as a PDF or Word document. Customize and print a blank Loan Payoff Letter for free. After you receive your payoff quote, it's time to make your final payment. You can pay with a certified check or through a wire transfer from your bank. 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.