A formal legal document known as a "legal notice to recover loan amount" is delivered from the creditor, who lent the money, to the debtor, who took it, requesting that the remaining sum be returned. It is a legitimate step in the process of getting that money back. When someone refuses to refund your money, you have legal rights, regardless of whether they are a friend, relative, business partner, or coworker. It's a formal, legally supported demand that demonstrates your seriousness, not merely a form of intimidation. Before legal action starts, it provides the borrower with one more chance to repay.