The City of San José processes requests for payoff demands of existing homebuyer and home repair loans, and affordability restrictions (i.e. 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. If so, is there one specifically that you typically use? This is an example of a payoff letter used in a syndicated loan transaction. This payoff letter (including the defined terms such as Lenders,. A payoff agreement is an informal contract in which a creditor agrees to accept the balance of a debt owed as full payment. A 10 day payoff is crucial to getting your old loans paid off during a refinance. Learn how it works from start to finish. Interest accrues on your student loan balance every day.