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The Confirmation Letter For Loan is a crucial document in Saudi Arabian banking practice, used to formally document and confirm the approval and terms of a Sharia-compliant loan facility. It is typically issued following initial loan approval and prior to the full loan documentation process. The letter serves multiple purposes: it provides official confirmation of the loan approval, outlines the key terms and conditions, ensures compliance with Islamic banking principles, and meets Saudi Central Bank (SAMA) regulatory requirements. This document is particularly important in the Saudi Arabian context as it must balance conventional banking practices with Islamic finance principles, specifically avoiding interest (riba) and incorporating appropriate Sharia-compliant structures. The letter forms part of the formal loan documentation and may be required for regulatory compliance, audit purposes, or future reference.

1. Letter Header: Official letterhead, date, reference number, and addressing the borrower

2. Subject Line: Clear identification of the purpose: 'Confirmation of Sharia-Compliant Loan Facility'

3. Opening Statement: Reference to any prior discussions, applications, or agreements that led to this confirmation

4. Loan Details: Fundamental terms including principal amount, purpose, profit rate (not interest, to comply with Sharia), and tenure

5. Repayment Terms: Schedule of repayments, payment method, and account details

6. Key Conditions: Essential conditions that must be met, including any Sharia-compliance requirements

7. Security and Guarantees: Details of any collateral, guarantees, or security arrangements

8. Confirmation Request: Request for the borrower to confirm acceptance by signing and returning

9. Closing: Standard closing, signature block for bank authorized signatory