What is a liability letter and why is it needed to switch banks?
A liability letter, issued by your current bank, states your exact outstanding balance, the applicable early settlement fee, and any closure conditions. The incoming bank requires it before issuing a final offer, since it confirms the payoff figure. It is usually valid for only 15 to 30 days, so the buyout must complete within that window.
Rules and eligibility criteria change — confirm the current position with the relevant authority before acting. This is general information, not legal advice.
