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The Loan Confirmation Letter is a critical document in Canadian lending practices, typically issued after a loan application has been approved but before or concurrent with the disbursement of funds. It serves multiple purposes: confirming the lender's commitment, documenting key loan terms for the borrower's reference, and meeting regulatory requirements for written disclosure of lending terms. The letter must comply with federal regulations such as the Bank Act and provincial consumer protection laws, particularly regarding interest rate disclosure and cost of borrowing requirements. This document is commonly used in both consumer and commercial lending contexts, providing a clear, concise summary of the loan terms while referring to the master loan agreement for complete terms and conditions. The Loan Confirmation Letter is particularly important in Canada's highly regulated banking environment, where clear documentation and disclosure of financial terms are legally mandated.

1. Letterhead and Date: Bank's official letterhead and current date

2. Recipient Details: Borrower's full name and address

3. Reference Line: Reference to loan application/agreement number

4. Loan Amount Confirmation: Clear statement of the approved loan amount

5. Key Loan Terms: Interest rate, term length, payment frequency, and total cost of borrowing

6. Repayment Schedule: Details of payment amounts, frequency, and start date

7. Interest Calculation Method: Explanation of how interest is calculated and compounded

8. Disbursement Details: How and when the loan funds will be disbursed

9. Contact Information: Bank representative's contact details for queries

10. Signature Block: Authorized bank signatory details and signature