Is it possible to set up automatic loan payments?

Yes, financial institutions allow customers to set up automatic monthly payments for loan repayment by setting up standing instructions through NACH or ECS facilities.

This enables the exact EMI amount to be automatically deducted from the customer's bank account linked to the loan on the due date. Customers avoid the hassle of manual payments every month.

To set up auto-debit payments, customers must fill out a simple online form with their loan account details and authorise the lender to deduct monthly instalments. This can be done while applying for the loan itself.

The NACH mandate needs to be renewed yearly. Customers must maintain sufficient balance in their accounts to avoid failed transactions or penalty charges.

Activating the auto-debit facility requires only a few clicks online. Most lenders also send notifications before deduction as a reminder.

Automatic payments prevent delays or defaults due to forgotten due dates, ensuring a good credit rating. If preferred, customers can deposit the exact EMI amount in their linked account a few days before.