When a bank or loan firm gives loan to individuals or companies, they agree to make the installments on time in order to return the loan amount. It is possible that due to any reason the company doesn’t make the payment on time so it’s the responsibility of the loan company or bank to inform that company about the matter that they are late with the payment and the letter that is sent for this purpose is called late payment notice.
Brief Description of Late Payment Notice:
It is very common that when companies and individuals do business on credit (without instant payment), sometimes one party can’t make the payment on time. If that happens, it is the responsibility of the other company to send a formal letter of inquiry to find out what is the reason behind the payment being late so that even if there was a problem with the other company or individual related to payment, they can explain it in time and there won’t be any need to include the court or legal departments.
For example, a bank gives loan to a person and they both agrees that he will make monthly installments on every 5th of each month and after few months, when the bank doesn’t receive the payment on the 5th, it sends the late payment notice to that person asking about what happened and why didn’t he make the payment.
On the other hand, in a similar situation when the person finds out that he won’t be able to make the payment on time this month, he notifies the bank before the 5th so that when he can buy some more time and the bank knows that he didn’t late the payment intentionally. This way the bank and the person will resolve the problem with mutual agreement and there won’t be any need to include the court or legal department.
Types of Late Payment Notices:
There are basically two types of late payment notices; one that is sent by the company that receives the payment and the other one that is sent by the individual who makes the payments. If an insurance or loan company finds out that a loaner didn’t make the payment on time, it sends him the notice in order to contact the company and show cause of the late payment. On the other hand, when a person finds out that he won’t be able to make a loan installment payment on time, he contact the loan company and let them know that he will pay the installment a few days after.
Elements of a Late Payment Notice:
- Name of the company or loan firm that is sending the notice
- Name of the individual who is sending the notice
- Date when the notice was issued and sent
- Show cause of the late payment or reasons why one can’t make the payment on time
- Possible outcomes if one ignores the notice
- Legal actions that the company can take in the future against the loaner
Here is preview of a Free Late Payment Notice Sample created using MS Word,
Here is download link for this Late Payment Notice Sample,