Auto Debit Facility: What is it and What are Its Important Benefits?

  • Updated on: 26 Dec 2023
  • Published on: 8 Feb 2023
Auto Debit Facility: What is it and What are Its Important Benefits?

In today’s fast-paced world, there are multiple things that demand your time and attention. Sometimes it can be difficult to keep up with things that inevitably fall through the cracks. Thanks to the new-age banking solutions, your bill payments are one of your to-do lists that can be prioritised and taken care of without much effort. Whether you need to transfer funds or make monthly instalments, digital banking solutions like the auto-debit facility have made financial management much easier. 

The auto debit facility is a system that helps you set up an automatic bill payment plan to manage your credit cards, utilities or even entertainment expenses. You can also utilise the autopay facility for your loan payments, eliminating the strain of missing EMIs.

With the scheduled payment system, all your payments are debited automatically on a fixed date, every month. All you have to do is inform the lender while completing the KYC documentation to activate the auto debit option. 

Read on for a brief overview of this automatic payment facility and its umpteen benefits.

How to initiate a direct debit from your bank account?

Automatic payment solutions help manage all your EMI payments on time. You can set up this facility using the below options:

  • Banks/financial institutions
  • Cloud-based software
  • Vendor’s website

To initiate this facility, simply call the customer service of your bank. Alternatively, you can also raise a request when availing of a credit facility. Post this, the bank will activate this option in less than 24 hours.

When activating the automatic debit option via the NetBanking mode, all you need is your NetBanking ID and password. Then, log in to your account and select the preferred option to activate your automatic payment facility. 

Subsequently, you can also visit your bank’s official website and activate the automatic payment option. Once you opt in for the facility, the amount is debited from your account on the set date every month. You can reschedule the date or stop the automatic payment facility as per your convenience. 

With this option, you don’t need to worry about handling payments manually. Whether you need to pay your DTH bills or clear your EMIs, simply schedule the date using this facility and it will get done on time.

What are the benefits of autopay options?

Besides being simple and easy to set up, there are other benefits of autopay options, which are:

1. Time-saving and convenient

One of the main advantages of using the automatic payment feature is the convenience it offers. On setting up this facility, all your bills and payments get paid without your intervention. You do not have to monitor the payment schedule. Simply, activate the facility, maintain an adequate balance in the account and the amount gets debited from your account systematically.

2. Boosts credit score

While the automatic payment feature saves time, it also helps improve your credit score. This is because you never have to worry about missing a payment. With the auto-debit facility, your dues are repaid on time and you even get reminders a few days before payment is due.

So, as long as you maintain the required balance in your bank account, your payments will get done on time. This includes loan and credit payments and it builds a healthy repayment track record which boosts your score. Remember, even one missed payment can cause a dip to your credit score and this facility eliminates the chance for the same.

3. Help in reward earning

Using the automatic debit option can earn you several rewards too. That’s precisely why you shouldn’t delay activating this feature. Pay your monthly bills on time and enjoy rewards like cashback, coupons or other discount options. Each time your account is debited, you can accumulate reward points which can be redeemed later.

4. Reduces environmental issues

By avoiding paper bills or cheques, you reduce the carbon footprint. This is one of the upsides to opting for the automatic payment facility. Since all payments and transactions are handled digitally, there is no need for any unnecessary paperwork and manual processes.

5. Minimises chances of identity theft

There is a lesser risk of identity theft when you avoid offline payments to clear your EMIs or credit card bills. Though online transactions also involves risk, it also offers you higher security while making such payments.

In fact, the RBI hiked the automatic direct debit limit up to ₹15,000 without any OTP to initiate a transaction. This makes the provision a lot more seamless as you are not required to provide OTP verification for larger payments. 

You can easily set up this automatic payment plan when you avail of a personal loan from Fibe. With a hassle-free documentation process and quick loan approval, Fibe allows you to address all your life’s upgrades with ease. So, whether you require funds for planned goals or unplanned emergencies, all you need to do is apply online at Fibe!


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