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Payoff Statements: What They Are and How They’re Used

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In a Nutshell

A payoff statement is a document that shows how much money a borrower must submit to fully pay off a loan. These statements differ from monthly account statements because they take into account interest, penalties, and/or benefits that could impact the overall balance before the "good through" date listed on the payoff letter.

Written by Natasha Wiebusch, J.D.
Updated November 29, 2021

How much money does it take to actually pay off a loan? If you’ve ever taken out a loan, you’ve probably asked yourself this question. Because of interest and fees, it’s sometimes hard to figure out how much you’ll pay in the end. 

If you want to know what it will take to pay off a loan, you’ll need to access a payoff statement (sometimes called a payoff letter). This document will tell you the amount that you’ll need to pay before your balance is resolved in full. 

What Is a Payoff Statement?

A payoff statement is a document that shows how much money a borrower will need to submit to their lender to fully pay off, or satisfy, a mortgage or other loan. Payoff statements are prepared by lenders. Also called a "mortgage payoff letter" (when applied to a mortgage loan), payoff statements always include the following information:

  • The account number

  • The full payoff amount that must be paid to close the loan, which may include additional accrued interest, fees, or prepayment penalties (if applicable)

  • “Good through” date, also called the payoff date, which is the date when the loan should be paid off in full

The quoted payoff amount is accurate through the "good through" date. If the loan is not paid off by the good through date, a new payoff quote must be requested because the payoff amount will likely change. This could either be because additional interest will build up and need to be added, other charges may apply, or the benefits of early repayment might change the total amount.

Payoff statements might also include additional information, such as:

  • Interest that will be rebated due to early payoff

  • Interest rate

  • Remaining payment schedule

  • Money saved for early payoff

Payoff Statements vs. Monthly Statements

Payoff statements and monthly statements aren't the same. Payoff statements show the payoff amount, or the total amount needed to completely pay off the loan balance, including accrued interest and any fees. Generally, such documents assume you would pay off the loan balance according to the payment schedule. 

Monthly statements only give you a snapshot of your loan balance along with the amount due for your next required monthly payment. Monthly statements don't account for the future interest that will be added to the total principal balance over time and specialized fees. Because of this difference, the payoff amount listed in a payoff statement is usually not the same as the balance shown on a monthly account statement. 

How to Get a Payoff Statement

You can request a payoff statement or the payoff amount for any type of loan at any time from your loan servicer(s). A loan servicer is the entity that handles all billing and accepts loan payments. This includes mortgage, car loan, student loan, personal loan, and other types of loan. So, for example, if you're a homeowner asking for a payoff statement related to your mortgage, you can make a payoff request to your mortgage servicer. 

Asking for a payoff statement is sometimes called a payoff request. Making this request doesn't mean that you have to pay the loan back early. For example, you may want to request your payoff amount to determine whether you want to pay off your student loans early, but the request won’t start that process.

Online lenders may show you a payoff amount online after you request this information. However, traditional financial institutions will usually mail you a more formal and comprehensive payoff statement if you request one.

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When Are Payoff Statements Used?

There are some important situations wherein you or a lender could use a payoff statement:

Mortgage Refinance

If you own real estate, you likely have a home loan, which is called a mortgage. It doesn’t matter whether you're refinancing to avoid foreclosure or if you want to lower your monthly mortgage payments. Either way, your new mortgage lender may ask for a payoff statement to see how much you owe on your current loan before they grant you a refinance loan.

Debt Consolidation Loans

Debt consolidation occurs when you, as the borrower, decide to streamline various debts you owe into a single loan. If you've applied for a debt consolidation loan, the new lender who would approve the loan will likely require you to provide payoff statements from your current creditors.

Debt Relief Companies

Debt relief companies work with borrowers to lower debt by negotiating debt settlements and consolidation loans with lenders. If you're working with one of these debt relief companies, they will need payoff statements from your creditors. They need to see your current balance and payoff amounts so they can negotiate appropriate terms with your lenders.

Collection Actions

If a creditor decides to take collections actions against you to collect money owed, they will usually send you a payoff statement. This statement will usually include account identification information (like your loan number) and payoff requirements necessary to stop further collection actions from going forward.


Payoff statements may also be used with liens. Liens are commonly placed on high-value items like cars or real estate. The payoff statement will come with a notification that a legal claim has been made to seize your property if you don’t pay the full amount listed in the payoff statement. Liens may also be sent to homeowners who are about to go into foreclosure.

Let's Summarize...

Payoff statements are common, but remember that they’re not the same as monthly statements. Payoff statements are statements prepared by lenders or creditors identifying an exact amount necessary for full payment of a loan, a mortgage, student loan debt, or other debt. They’re often used in refinancing, consolidation loans, debts in collections, and other situations wherein a lender wants to know how much must be paid to satisfy a loan. 

If you have debt and you want a payoff statement, you can request one by contacting whichever lender or creditor holds the debt. And don’t worry, you don’t have to pay off the loan early just because you’ve requested a payoff statement. This document is to be used for your reference, nothing more.

Written By:

Natasha Wiebusch, J.D.


Natasha started her career as a lawyer representing labor unions and other investors in multi-state class action lawsuits. Passionate about the civil rights elements of her cases, she moved into practicing employment law to represent employees against discrimination of various ki... read more about Natasha Wiebusch, J.D.

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