Document background
A Payoff Letter From Lender is a crucial document in Pakistani banking practice, typically issued when a borrower requests to fully satisfy their loan obligations or refinance with another institution. The letter serves as an official statement from the lending institution, detailing the exact amount required to completely discharge the debt, including all principal, interest, and fees. Operating within Pakistan's banking regulatory framework, the document must comply with the Banking Companies Ordinance 1962, State Bank of Pakistan regulations, and where applicable, Islamic banking principles. The letter includes specific payment instructions, validity period, and conditions for releasing any associated collateral or securities. It's particularly important in real estate transactions, corporate refinancing, and loan settlements, providing legal certainty for both the lender and borrower regarding the full satisfaction of the debt obligation.
