Personal Loan Application Letter Practice Questions: MCQ Quiz on Personal Loan Application Letters with Answers

Question 1:  What is the primary purpose of a personal loan application letter?

(A) To request a loan from a bank or lender

(B) To inform the lender of the applicant's savings

(C) To offer investment options to the bank

(D) To compare loan products

Question 2:  Which detail is essential to include in a personal loan application letter?

(A) Applicant's favorite hobbies

(B) The loan amount needed

(C) A list of friends' references

(D) A thank-you note only

Question 3:  What tone should be used in a personal loan application letter?

(A) Casual

(B) Polite and formal

(C) Humorous

(D) Aggressive

Question 4:  What should you avoid in a personal loan application letter?

(A) Providing accurate information

(B) Using clear and simple language

(C) Adding unnecessary personal stories

(D) Mentioning your repayment plan

Question 5:  Which of the following is NOT necessary in a personal loan application letter?

(A) Personal details

(B) Loan amount and purpose

(C) Proof of income

(D) Bank's investment plan

Question 6:  What should you clearly mention about the loan in your letter?

(A) Loan amount and repayment plan

(B) Bank's history

(C) Reasons for choosing the bank

(D) Current bank offers

Question 7:  What is the best way to address the recipient of the letter?

(A) Dear Friend

(B) To Whom It May Concern

(C) Respected Sir/Madam

(D) Hey Team

Question 8:  Why is it important to include proof of income in the letter?

(A) To show financial stability and repayment ability

(B) To display personal achievements

(C) To make the letter longer

(D) To impress the lender with words

Question 9:  Which closing phrase is appropriate for a loan application letter?

(A) Thanks in advance!

(B) Warm regards

(C) Yours sincerely

(D) Take care

Question 10:  What should you mention if you need a loan urgently?

(A) The urgency and reason

(B) The lender's background

(C) Your past experiences with loans

(D) None of the above

Question 11:  What makes your letter more professional?

(A) Writing in short forms like 'u' and 'pls'

(B) Including clear paragraphs with all details

(C) Writing in all capital letters

(D) Adding emojis

Question 12:  What is the benefit of adding a repayment plan to your letter?

(A) To confuse the lender

(B) To show how you will repay the loan

(C) To make the letter longer

(D) To show how wealthy you are

Question 13:  What should you do before sending the letter?

(A) Read and check for errors

(B) Leave it without signing

(C) Rewrite it entirely

(D) Add unrelated information

Question 14:  What is the purpose of a subject line in the letter?

(A) To confuse the lender

(B) To summarize the purpose of the letter

(C) To include personal stories

(D) To praise the bank

Question 15:  Which is the best way to explain why you need the loan?

(A) Be vague and leave details out

(B) Clearly state the reason and use polite language

(C) Demand the loan without explaining

(D) Avoid mentioning the purpose

Question 16:  How should you format the letter?

(A) Use headings and paragraphs for clarity

(B) Write everything in one big paragraph

(C) Use slang and casual language

(D) Ignore formatting

Question 17:  What is the importance of mentioning the repayment ability in the letter?

(A) To confuse the lender

(B) To assure the lender of your financial responsibility

(C) To show off your assets

(D) To fill the letter with unnecessary details

Question 18:  What should you use to make your letter look professional?

(A) Bold font and casual language

(B) Formal salutation and proper grammar

(C) Emoticons and jokes

(D) Flashy images

Question 19:  Why is it important to include contact details in the letter?

(A) So the lender can contact you for follow-up

(B) To make the letter look long

(C) To confuse the lender

(D) None of the above

Question 20:  Which is the best way to close your letter?

(A) Yours sincerely

(B) Catch you later

(C) Goodbye

(D) Best wishes