What Is a Letter of Financial Support?
When a person is applying for college, submitting an application for an apartment, buying a car, or any other activity that will require a large down payment and additional future payments, they will need to provide proof that the payments can be met. When a person is unable to do this on their own and will require the financial support of another individual, they will need to submit a Letter of Financial Support to show they will have someone financially backing their endeavor.
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This letter will show the entity receiving the payments that they can expect timely payments will be met and if the person signing the application or purchase is unable to cover all the payments necessary, you will be able to fulfill any outstanding financial obligations.
How to Write a Financial Support Letter?
To create your own Financial Support Letter you will want to include the following information:
- Name and address of the applicant.
- Your name and address.
- The subject line should identify the document as a "Letter of Financial Support" and should feature the name of the applicant.
- Opening salutations.
- Begin your letter by stating the reason why you are writing this letter (the purchase of real estate, for renting a premises, for university enrollment, etc.). In the opening paragraph, you will want to state that you will be acting as a financial supporter of the applicant should at any point during the agreement they will be unable to provide the full financial payments they have agreed to.
- You will then want to include all relevant names, including the applicant, yourself, a spouse or additional person that will also act as a financial supporter and the business entity, school, or person that will be receiving the payments. It is important to include all necessary people in this section so each person involved in this process will be kept up to date at all times.
- If you are from a lending agency acting as a financial supporter, you will need to include the name of your lending agency, contact information, and any other proof to show that you are a legitimate lending organization.
- Include the full amount the applicant will be responsible for paying, any down payment(s) required, future payments, how often each payment will be expected (such as monthly, quarterly, annually, etc), and any interest that may be applied. You can also list how each payment will be made and who will receive each payment.
- If you are submitting a letter of financial support as an individual and not a lender, you will want to include copies of banking or other financial statements proving that you are financially able to complete all future payments until the full amount is paid should the applicant be unable to do so.
- A closing statement including your contact information should any additional verification of income or other questions arise.
- Closing salutations.
- Your name and signature.
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