Document background
A Demand Letter for Loan Payment is employed when a borrower has defaulted or fallen behind on loan payments, and the lender wishes to formally demand repayment before pursuing legal action. Under English and Welsh law, this document forms a crucial part of the pre-action protocol and can be used as evidence in subsequent legal proceedings. The letter must clearly state the outstanding amount, provide payment details, and specify consequences of non-payment. It's essential to ensure the demand complies with relevant legislation including the Limitation Act 1980 and, where applicable, the Consumer Credit Act 1974.
