Why didn’t my Direct Debit extract?

I never liked the first couple days of the week at work.  Especially if I was doing Direct Debit emails.  It felt like many of them were simply: My payment didn’t pull!  Will I get late fee?  Credit reported?

If your Direct Debit doesn’t extract there is a few possibilities.  Check these first before you make any moves.

1)It hasn’t been set up yet, even if approved

To avoid double payment many companies don’t start Direct Debit till the following billing cycle.

What you should do: Once you confirm this is the reason, keep making payments.

What you shouldn’t do: Send in a new application.  New applications often times cancel the old one.  I once had a borrower who when they applied it took a billing cycle to begin and when it didn’t pull, they kept sending in new applications to “fix it” which kept cancelling the old one and suspending it one more month.  This went on for about 6 months before he finally emailed in about it.

2) It was denied

This could happen during the original application if your banking information was incorrect or if you had insufficient funds.  Remember most companies will try to pull twice if no funds so don’t make a payment in between!

3)Non-business day

Where I worked this one was the most common.  Direct Debit is tied to banking so if the bank is closed it can’t pull.  As a result if it fell on a weekend or holiday it usually comes out the next business day but can take up to three business days later.

What to do: Call in and ask or wait

What not to do:  Make a payment.  While this will help you account over all (extra payments are always good), it will result in you getting double billed.

But how do I avoid bad things from happening?

Like I said get an explanation first.  If your loans are private, every company is different but for the Title IV federal loans, you have time to find out.  They do not charge late fees and you will not be negatively credit reported for at least the first 90 days.

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