How to setup a Direct Debit
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Do you want to make direct payment or you agreed that an organization will withdraw money directly from your fund from your account on a fixed date? This is called Direct Debit, Pre-authorized Debit (PAD), Pre-authorized Payment (PAP) or Direct Withdrawal.
It is a financial transaction set up by the organization that you are making payment to whereby the organization is authorized to withdraw money from your account on a fixed date for the payment of the debt you owe or the transaction that you made.
It is used when you are making payments for a fixed debt (recurring payment) such as tax and insurance payments or when you are paying for bills such as credit card bills, gas bills or even a loan.
The organization take the money at the agreed date, all you have to do is sign that the amount will always be withdrawn from your account on the agreed date. It is important because you won’t have to be reminded especially where fines and penalties apply for late payment.
Read on to find out how to successfully set up a Direct Debit in your bank account.
How to Set up a Direct Debit in Your Bank Account
Setting up a direct debit in your bank account is just a simple process. To set it up, the company which is receiving the payment will give you a form to fill and the form will be given to you either online, with your phone or offline.
In the form that is given to you, this is what you would do:
- Fill in you bank account number that you want to make the payment with
- fill in the branch sort code of your bank
- Your name
- Your resident address
- Your bank name
- Your bank address
- Bank Account name
- After that, you submit the form and then confirm your Direct Debit instruction
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This is all you have to do.
How to cancel the Direct Debit which I set up
If you wish to cancel a Direct Debit, this is what you will do;
- Contact your bank and tell them which of the Direct Debit you want to cancel
- Cancel it at most, a day before the Direct Debit is due, else they will tell you that the payment is already on the flight and that it cannot be cancelled
- Also, inform the organization that you have cancelled the Direct Debit that you were making into their account.
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After that, you have successfully cancelled the Direct Debit.
Note: Cancelling a Direct Debit only stops the payment but does not in any way cancel the contract.
You can see that setting up and cancelling a Direct Debit is a very easy task that won’t take much time to do. Please note that any other payment made in your bank that you didn’t authorize is not a Direct Debit, so you should meet your bank for a refund of the money.
If you are still owing the organization even after cancelling the Direct Debit payment, you can meet the organization for alternative payment methods. If this post was good, do not hesitate to share it with others who might need them.