Sample Letter of Explanation for February Payment - Invoice Number Included

Have you missed a payment and need to explain the circumstances to your lender? Or, are you looking to apply for a loan and want to provide additional information about your financial situation? In both cases, you may need to write a letter of explanation. BizzLibrary.com offers a professionally drafted letter of explanation template that you can download and customize to fit your specific needs.

What is a Letter of Explanation?

A letter of explanation is a document that provides additional information about a specific issue or circumstance related to your financial situation. It's typically requested by lenders when you've missed a payment, had a recent credit inquiry, have unusual transactions on your bank statements, or have major fluctuations in your income or expenses. They may ask for a letter of explanation to help them understand the circumstances and determine your creditworthiness.

When Do You Need a Letter of Explanation?

A letter of explanation can be needed in a variety of situations, including:

• Missed Payment: If you've missed a payment on a loan or credit card, a lender may ask for a letter of explanation to help them understand why it occurred and assure them that it won't happen again.
• Recent Credit Inquiry: If you've recently applied for credit, the lender may ask for a letter of explanation to clarify why there was a credit inquiry and verify that you haven't applied for too much credit in a short period.
• Unusual Transactions: If your bank statements have unusual transactions, such as large deposits or withdrawals, a lender may want to investigate further and ask for a letter of explanation to provide additional details.
• Fluctuations in Income or Expenses: If you have major fluctuations in your income or expenses, such as a recent pay cut or increase in rent, a lender may ask for a letter of explanation to help them understand how it will impact your ability to repay a loan.

How to Write a Letter of Explanation?

When writing a letter of explanation, it's important to provide a clear and concise explanation of the situation, including relevant details and timelines. Here are some tips to keep in mind when writing a letter of explanation:

• Be Honest: Be truthful when explaining the circumstances that led to your current situation. Lenders appreciate honesty and transparency.
• Be Concise: Keep the letter brief and to the point. Only provide the relevant information.
• Provide Supporting Documentation: If possible, provide supporting documentation to verify your explanation, such as bank statements or medical records.
• Proofread: Check for spelling and grammar errors before submitting the letter. Make sure it's easy to read and understand.

Download Our Letter of Explanation Template Now

At BizzLibrary.com, we offer a professionally crafted letter of explanation template in DOCX format that you can easily download and customize. Whether you're explaining a missed payment or providing additional context for your financial situation, our template will help you draft a clear and effective letter of explanation. Don't wait until it's too late. Download our template today and take control of your financial future.