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Can I Stop Lenders Automatically Withdrawing Cash From My Account?


Key Points: 

  • In the US, payday lenders use a system called ACH Authorization to collect repayments from borrowers’ accounts directly. 
  • This means that you don’t need to remember your repayment date every month; the system does the thinking for you! 
  • Over 12 million Americans use payday loans every year, with the US boasting over 23,000 lenders. 
  • It is possible to halt these payments by writing to your lender and bank. 


While your payday lender will be accessing your account through permissions granted to them in your joint contract, it is possible to take this power away from them. To do this, you must write to your lender and to your bank (or credit union) so that your request is officially noted. 

By requesting that they do so, automatic requests will be stopped. You may choose to do this because you are rushing to get some more money into your account, or because you suspect that your lender is overcharging you. 


Why Do Lenders Take Automatic Payments From My Account?

Simply, it is for both their convenience and yours. They use a system called ACH Authorization which takes payments on a regular basis from your account. 

When you take out a loan, most lenders will ask you to choose a date (typically your payday) to make payments to them. This will occur on the same date each month until you have paid off your loan. 

To prevent you from having to remember to make your payments regularly and fully, they use a system that remembers for you. Most lenders will remind you that money is being removed so that you don’t get a shock. 

This process is similar to a direct debit and, if you’re happy with your lender having access to your money, is a time-saver. 


Know Your Rights With a Lender

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Why Would I Want To Stop Automatic Cash Withdrawals From My Account? 

You may begin to suspect that your lender is overcharging you, or taking money out too frequently. If this is the case, you should stop automatic payments immediately. This should not happen, and if you begin to question how trustworthy they are, you should once again check that your lender is regulated by checking their status on the OLA website or SEC register. 

You may have more pressing debts that you are more desperate to pay. You may want to stop payments while you get your hands on a further loan, a cash advance, or some help from a loved one. 

If you miss a repayment, however, you will incur late fees and could have to pay increased interest. 

How To Stop Lenders Withdrawing Cash From Your Account 

  1. Send a letter to your bank or credit union. In this letter, you must state that you want payments from your account to stop, and outline your bank details. 
  2. Send a letter to your lender. This legally required them to stop withdrawing from your account. Let them know that this applies to any and all future debits unless you inform them otherwise. 
  3. Ask your bank to ‘stop payment order on a payday loan.’ This stops an upcoming withdrawal, as long as you request this over 72 hours ahead of the withdrawal. You will need to send another letter, or contact your bank, to do this. 
  4. Clear your account. If there is no money in your account, there is no money for them to take. This should be a last resort and should only be done if withdrawals are excessive, too frequent, or you question the legitimacy of your lender.
  5. Settle your debts. If you settle your debts, your lender (assuming they are trustworthy) will stop withdrawing. 




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