If you would like to confirm that the borrower has re-paid a loan, here is a sample template you can use to write an acknowledgment letter for loan payment.
To [Recipient name]
Dear, [Recipient name]
This letter is to acknowledge the payment of the loan amount of [Amount] by [Borrower name] received on [Date] as decided in the terms of the loan payment with [Bank name].
The borrower with the bank account number [Number] has successfully completed the payment of the outstanding amount of the loan amount taken on [Date]. The interest amount of [Amount] garnered after the elapsing of [Number] [Weeks/Months] has also been paid by the borrower.
This is also to confirm that [Borrower name] does not owe any amount to [Bank name] hereafter.