Creating a payoff letter is essential to any loan or mortgage repayment process. Our free templates and this guide can help you get started.This is an example of a payoff letter used in a syndicated loan transaction. This payoff letter (including the defined terms such as Lenders,. 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. This article provides a template for a debt settlement proposal letter and explains what a debt settlement letter should contain. To do due diligence, the mortgage underwriter will ask you to explain the situation in a brief letter, which will be added to your mortgage application. Write a letter detailing your financial hardship. Explain why you can no longer afford to pay off the principal balance.