Quick question on direct debit

cwaddle · 8 July 2011 at 12:57AM

I have taken a loan of 4000 ish to pay back by direct debit to pay 400 pounds every month for 12 months, and the term states that there will be an admin charge of 20 pounds if the "Direct Debit is returned unpaid".

I have an overdraft facility of 350 pounds on my direct debit account. Will the admin charge be levied when
1) the direct debit liability leads to my account being less than 0 pound
2) the direct debit liability leads to my account being less than -350 pounds

Note that I have taken the loan from the same bank (Lloyds) that provides the direct debit so I'm worried they might play with their own account holder and start charging for getting into overdraft.

Many thanks

Joon

t0rt0ise · 8 July 2011 at 6:40AM

The way you explain it, the admin charges is attached to the loan repayment. So if you miss a loan repayment because the DD bounces you pay the 20 pound charge. If you're allowed an overdraft then the DD won't bounce.

DarnIt_3 · 8 July 2011 at 6:47AM

It is only when the loan is not paid that you will get charged. If you have a legitimate OD (which you have) your DD will not bounce or shouldn't as long as you have +50£ in your account.