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.A 10 day payoff is crucial to getting your old loans paid off during a refinance. Learn how it works from start to finish. The letter should have a formal, respectful and positive tone. It should also include all key information that the creditor or collection agency needs to know. A payoff statement should include the name and address of the lender preparing the statement and be addressed to the lender that requested the payoff. First, get a piece of paper and a pencil or pen. Then write your request on the paper. If you want to know what it will take to pay off a loan, you'll need to access a payoff statement (sometimes called a payoff letter).