How to Update the Mandate for Your Personal Loan Account

If you are taking out a personal loan, it’s mandatory to register your bank account for monthly repayments. Keeping this information updated is crucial for managing repayments and maintaining a healthy credit profile. That’s why it’s important to know how to update the mandate for your personal loan account.

A mandate is your authorisation for a lender to debit EMIs from your bank account. This process is generally facilitated through the National Automated Clearing House (NACH). It’s important to make sure this mandate is up to date, as an outdated one may result in missed payments, late fees, or negatively impact your credit score.

In this article, you will understand how to update personal loan account details to make seamless repayments and avoid unnecessary disruptions.

Why You Might Need to Update the Mandate

The mandate for a personal loan account is usually set up through the NACH. It authorises your bank to debit EMIs automatically from your account. During loan repayment, there are chances that your bank account could change. This could be due to shifting jobs, switching to a bank with better features, or closing an old account. In this case, it’s important to make sure you update the auto-debit instructions for your personal loan to avoid repayment issues. This could lead to penalties and transaction failures.

Other reasons for changing your loan payment mandate could be modifications in EMI amounts or changing the date of your EMI deduction.

Steps to Update the Mandate for Your Personal Loan Account

Knowing how to update the mandate for your personal loan account ensures your EMIs continue smoothly without any defaults. Here is a step-by-step guide to updating your NACH mandate:

1. Inform Your Lender: The first step is to let your lender know about your intent to change the NACH mandate.
2. Submit a Mandate Change Request Form: This is the formal mandate change request for your loan account. Make sure all details are accurate, especially the new bank account information.
3. Provide Necessary Documents: You may have to submit a cancelled cheque from your new bank account and any other documents requested by the lender to verify the change.
4. Authenticate the New Mandate: Your lender will initiate a fresh NACH registration. Depending on your lender, this may require OTP-based verification or a signed physical mandate.
5. Continue EMI Payments: Make sure EMI payments continue to avoid defaults until the new loan EMI mandate update is processed and active.

*Please note that the exact process may vary by lender.

Common Methods to Update Mandate

There are several ways to update the NACH mandate for your personal loan account. Most financial institutions offer these options:

Online Update

Many lenders will allow you to initiate a personal loan mandate update process through their website. You must log in to your loan account and submit a mandate change request. You can then verify your new bank details and authenticate the update via OTP.

Branch Visit

If you wish to do it offline, visit the nearest lender branch. You may need to fill out the mandate change form and submit any required documents. This can be useful when a signature is required for authentication.

Through Customer Support

Some lenders offer mandate updates through customer support. You can initiate the personal loan account mandate change procedure by contacting the helpline and requesting a physical or digital form.

Auto-Debit or Electronic Clearing Service (ECS) Update

Updating the ECS mandate for loan payments is important if your EMI is deducted through auto-debit or ECS. This involves coordinating with both your lender and your bank to update existing instructions.

Tips for a Smooth Mandate Update Process

Updating the mandate for a personal loan account can be very straightforward. This is how you can ensure the process is completed quickly and without interruptions to your EMI schedule:

Act Early

As soon as you know about an account change, begin the process to modify the payment mandate for your personal loan account. This helps avoid any gap in EMI payments.

Check All Details Carefully

Any mismatch can lead to rejection. Always verify the information before submitting the mandate modification for your loan account.

Maintain Enough Balance

While the mandate is being processed, keep sufficient funds in your current bank account to avoid EMI bounce charges.

Track Your Request

Keep a record of your loan repayment mode change request and regularly follow up with your lender until you receive confirmation that the new mandate is active.

Conclusion

Making sure your loan repayment instructions are up to date is important for making EMI payments on time and keeping your credit profile strong. Follow the proper steps and use the right channels to initiate a personal loan account mandate change.

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