Payoff Statement Law and Legal Definition

A payoff is the complete repayment of a loan. A complete payment includes: principal, interest, and other amounts due. A payoff statement is a statement prepared by a bank regarding a payoff. A payoff statement contains the loan amount, payment made towards the loan, balance due, and the interest rate. The amount of interest incurred from prepayment will be included in a payoff statement. It is also known as letters of demand. Usually a payoff statement is prepared for mortgages. However, a consumer can demand a payoff statement for other types of loans.