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 payoff request can be created and mailed for free. How long does it take to obtain a payoff? "I am writing to request a payoff letter for my loan, account number XXXXXXXX, with a requested payoff date of (date)." 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.