Missing a loan instalment can land you in hot water with your lender, result in hefty penalties and negatively affect your credit score. One easy way to stay on top of your payments is to put a debit order on your loan instalments. But what happens if the details on your debit order are incorrect? What happens if your loan is paid off but the instalments are still being debited from your account? Is it possible to reverse a debit order?
Yes, it is possible to reverse a loan debit order! Depending on your lender and your bank, you can reverse a loan debit order by either visiting your local branch or through mobile or online banking. The debit order should be reversed immediately, and the money will reflect in your bank account within a few days.
There are two general types of debit orders: EFT Debit Orders and Early Debit Orders (EDO).
EFT Debit Orders are processed later, often after business hours or on a date you choose. For example, you can choose to have your loan instalments be paid on the 25th of every month. If you have insufficient funds to process the debit order, your bank will contact you and you will have to authorise a new debit order.
On the other hand, Early Debit Orders are processed at midnight after a credit payment is made to your account. For example, with an Early Debit Order, you can expect your loan instalment to be paid just after midnight on the day you receive your paycheck.
DebiCheck is an initiative launched by the Payments Association of South Africa that aims to help prevent fraud and misuse of debit orders. A Debicheck debit order is a type of debit order offered by banks, which requires consumers to electronically confirm the details of the debit order before it is processed. If the details of your payment change you will be asked to confirm the debit order again.
Most banks allow you to reverse a debit order through their mobile banking app or online banking portal. Alternatively, if you're not comfortable with internet banking, you can phone their customer service helpline and speak to a trained consultant or visit your local branch to request a reversal. Let's look at how you can reserve a loan debit order at one of the major banks:
To reverse a debit order with Nedbank, you can use either their Money app or online banking portal. Simply log on and select the correct bank account, then select the Debit Orders tab, and tap on the relevant debit order. Then tap ‘Stop’ on the details page of the debit order. The process is the same whether you use the app or online portal.
Unfortunately, FNB only allows debit orders under R200 to be disputed online. You will need to visit your local branch or call the number on the back of your card to access telephone banking. It is recommended that you dispute debit orders as soon as possible, preferably within 40 days of the order going out. If you dispute the debit order older than 40 days, you may be required to wait up to 40 business days for FNB to confirm the details on your dispute form.
Absa Bank only allows debit orders under R500 to be reversed through their online banking portal. To reverse a loan debit order you will likely need to visit your local branch and speak to them about reversing the debit order. You may require your banking details and identity documents for the reversal to be authorised.
Standard Bank also only allows debit orders under R500 to be reversed online, so you will likely need to contact their customer service helpline or visit a local branch. Be sure to carry your bank card and identity documents along with you.
With African Bank, you have the option to dispute or stop a debit order. Unfortunately, debit orders over R1 000 cannot be disputed or stopped online. You will need to contact your local branch and explain that you need to reverse the loan debit order.
If your loan instalment is less than R1 000, you can dispute the debit order by logging in to the banking app and selecting the 'Stop/dispute debit order' tab. Next, select the relevant account and debit order. You will then need to confirm the details of the debit order and confirm that you want to dispute the debit order.
Before trying to reverse any payments, it’s important to understand the type of payment you have made. Whilst debit orders and stop orders may seem like the same thing, they are different types of payments.
Stop orders are an agreement between you and the bank in which you instruct the bank to make a series of payments. These payments are future-dated, meaning the money will be automatically deducted regularly. While you can cancel stop orders, you cannot reverse a stop order. Once the money leaves your account, it cannot be refunded!
Debit orders are an agreement between you and someone else (a third party) in which you give the third-party permission to withdraw funds from your bank account. Debit orders usually occur every month and can be used to pay for loan repayments, subscriptions, and other bills. While debit orders are a convenient way of making sure your bills are paid on time, it is important to keep track of where the money is going and who the recipient should be.
Lastly, regularly check your bank statements and make sure that you recognise all payments that have been authorised. If you suspect you have been a victim of fraud when it comes to debit or stop orders, it’s important to immediately contact your bank’s local branch.
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