Bank Confirmation Letter – How a Bank Confirmation Letter works

Bank Confirmation Letter - How a Bank Confirmation Letter works

Bank Confirmation Letter¬

A bank confirmation letter is a letter issued by a bank or. Financial institution to confirm the existence of a loan or even the line of credit if. Extended for a borrower. The letter stands in gap as permission to a borrower who. Could be a company, individual, bearing the eligibility status, amount, and specified purpose.

Bank Confirmation Letter - How a Bank Confirmation Letter works

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What you should know

  • Firstly, do you know that a bank confirmation letter (BCL) is proof that a. Bank has a line of credit in place with one of its customers?
  • Secondly, do you know that bank business customers demand. Bank confirmation letters as a confirmation of creditworthiness?
  • Also, do you know that BCL can be requested during the. Purchasing of a home or land in order to stay up to date. With their creditworthiness or to secure a mortgage?
  • Lastly, do you know that a bank confirmation letter serves for both parties in the transaction with. The bank and necessary financial resources to conclude the transaction?

How a Bank Confirmation Letter works

The bank confirmation letter is with the purpose of assuring the seller. Of the sufficient financial resources that the. Borrower has in order to complete a transaction. The letter can be seen as a. Comfort letter but this does not guarantee payment from the. Borrower instead, it assures the borrower’s financial resources to make payment.

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Bank confirmation generally calls for. Signature from the representatives of the bank or authorized financial institution.

Each confirmation letter issued by a. Financial institution or bank is entitled to a particular project and cannot be transferred to. Govern another project. If you want to pick up another deal, it requires you to obtain a. New letter of confirmation as each project is entitled to its lines of obligations. Assuming you are into estate dealings, the purchase of an estate. Should have a confirmation letter and when you are handling another project of that kind. Another BLC will be involved.

However, because regulation varies in each country, it also means that the letter of confirmation must state the specific. Purpose for the loan or have the line of credit extended to the borrower.


  • A confirmation letter is commonly prepared for a. Business customer of a bank which states the existence of a specified obligation.
  • This letter as well serves as an assurance to. The seller of the number of financial resources that the borrower has in order to complete a transaction.
  • Companies into joint venture projects with. Other companies should be issued BLC.
  • This guarantees a high possibility of the. Company receiving payment from the debtor.
  • Individuals commonly make use of the letter. Of confirmation when purchasing a home or land. This is very common.