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 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. Mortgage lenders ask for a letter of explanation to better understand your finances when determining whether to approve you for a loan. This document is a debt payoff letter from a debtor to a creditor. A mortgage payoff statement details the total amount needed to fully pay off a loan as of a specific date. Request your free payoff quote in one of two convenient ways. You'll choose your good-through date up to 30 days. This is an example of a payoff letter used in a syndicated loan transaction.