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Demand Letter for an Unpaid Personal Loan

A demand letter is a formal request for payment before a dispute escalates. It should state the loan amount, the amount paid, the balance, the due date and a clear deadline for payment.

What to prepare

  • Lender and borrower full names and addresses
  • Date and amount of the original loan
  • Payments already received and the remaining balance
  • Due date and any agreed interest or penalties
  • Payment deadline and accepted payment methods

Good to know for this situation

  • Attach or reference the promissory note, transfer receipts and a payment ledger.
  • Keep the tone factual. Threats or harassment can weaken your position and may be unlawful.
  • Send the letter by a method that gives proof of delivery, such as courier or registered mail.
  • For large amounts or disputed loans, have a lawyer review the letter before sending.

Template only, not legal advice. Checked 2026-11-11.

Questions

Is a demand letter required before filing a case?
It is not always a strict requirement, but it is strong evidence that you tried to collect and it can lead to settlement without litigation.
Can I include interest and penalties?
Only if the loan agreement or promissory note provides for them, or if the law allows. State the basis clearly.
What if the borrower ignores it?
Keep proof of delivery, then consider small-claims court or a lawyer depending on the amount. The demand letter becomes part of your evidence.

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