20 Jun 2022

What is the difference between direct debit and automatic payment?

Direct Debit VS. Automatic Payment

There are only small differences between a direct debit and an automatic payment. With a direct debit payment, the user gives permission to a merchant for a desired amount on a specific date. Sometimes, this payment is repeated, but not necessarily. However, an automatic payment is a frequent payment that is automatically withdrawn from an account on the same day as well as the same amount.

Both of these payment methods have their own benefits and disadvantages. For example, since the user needs to give the merchant and companies permission, this is a similarity. However, when it comes to a direct debit payment, the amount can change depending on the total price. Also, a direct debit payment can be modified; this is not the case when you have an automatic payment.

When you agree to either a direct debit or an automatic payment, it is important to review the information before submitting it. If the bank information is incorrect, there is a possibility that the direct debit or automatic payment will not go through. If this happens, it can be troublesome since some companies give late fees and penalties such as cutting out the service if it is not paid directly on time.

Direct Debit VS. Automatic Payment Conclusion

Here at Mortgage House, our experts are highly trained and ready to give you options for repayment. When repaying your loan, you can use an automatic payment reminder or a direct debit.

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