Private Loan Payoff Letter Template offers a clear and professional format for requesting an official statement of your loan payoff balance. What is a Payoff Agreement?A payoff agreement is an informal contract in which a creditor agrees to accept the balance of a debt owed as full payment. Creating a payoff letter is essential to any loan or mortgage repayment process. Our free templates and this guide can help you get started. 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. Collecting loan payments is often known as "servicing" the loan. To explore your options, contact your loan servicer directly. If you don't know who your private student loan servicer is, look at a recent billing statement.