What Time Do Direct Debits Go Out?

Wondering what time your direct debit loan payment will come out of your account? Learn more here in Savvy’s handy guide.

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Savvy Editorial Team
Savvy's content writing team are professionals with a wide and diverse range of industry experience and topic knowledge. We write across a broad spectrum of finance-related topics to provide our readers with informative resources to help them learn more about a certain area or enable them to decide on which product is best for their needs with careful comparison. Meet the team behind the operation here. Visit our authors page to meet Savvy's expert writing team, committed to delivering informative and engaging content to help you make informed financial decisions.
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, updated on December 22nd, 2023       

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Written by 
Savvy Editorial Team
Savvy's content writing team are professionals with a wide and diverse range of industry experience and topic knowledge. We write across a broad spectrum of finance-related topics to provide our readers with informative resources to help them learn more about a certain area or enable them to decide on which product is best for their needs with careful comparison. Meet the team behind the operation here. Visit our authors page to meet Savvy's expert writing team, committed to delivering informative and engaging content to help you make informed financial decisions.
Our authors
, updated on December 22nd, 2023       

Fact checked

At Savvy, we are committed to providing accurate information. Our content undergoes a rigorous process of fact-checking before it is published. Learn more about our editorial policy.

If you’re applying for a loan and setting up a direct debit for your payments, it’s worth knowing the time these go out. You can delve into this comprehensive guide to discover how they function, as well as the benefits of direct debits for loans in general, right here with Savvy today.

At what time of day does a direct debit go out?

The specific time of day when a direct debit is processed can vary depending on the financial institution and the type of payment. In Australia, it's common for direct debits to be sent in the morning, with transfers taking place as early as 5:00am in some cases.

Financial institutions often initiate these transactions to coincide with the banking system's daily processing cycle. However, the exact timing can differ, so it's advisable to check with your bank or the entity managing the direct debit to get accurate information. Being aware of when direct debits are processed helps you ensure that you have sufficient funds in your account to cover the payment and helps you manage your finances effectively.

What are the advantages of paying my small loan with a direct debit?

Paying your small loan through a direct debit offers several advantages, enhancing the convenience and efficiency of managing your financial commitments. Some key benefits include:

  • Automated payments: direct debit automates the loan repayment process, ensuring timely payments without the need for manual interventions. This reduces the risk of late payments and associated fees.
  • Consistent repayments: direct debits provide a reliable and consistent way to make repayments. This helps you budget effectively, knowing that the loan instalment will be deducted on the scheduled date every week, fortnight or month.
  • Avoiding late fees: by setting up direct debit, you decrease the likelihood of missing a payment deadline and incurring late fees. Timely payments positively impact your credit history.
  • Convenience: direct debits simplify financial management by eliminating the need to remember to make the payments yourself. This convenience contributes to better financial planning and organisation.

One potential drawback of a direct debit is, if you don’t have enough money in your account, you may be at risk of receiving a dishonour fee. This may be more likely to occur if you’ve taken a backseat approach to your payments which wouldn’t otherwise be the case if you were doing so manually. However, on the whole, direct debits offer a much more convenient way to manage your instant cash loan payments.

Do direct debits come out on weekends or public holidays?

Direct debits typically do not occur on weekends or public holidays in Australia. Financial institutions and payment processors generally operate on business days, which are Monday to Friday. If your direct debit falls on a weekend or public holiday, the transaction is usually processed on the next available business day.

It's important to be mindful of this when planning for payday loan repayments to avoid any potential issues with insufficient funds or delays. To ensure accuracy, check with your bank or the entity managing the direct debit for specific information regarding the processing schedule and any variations due to holidays.

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Disclaimer:

The information on this website is of general nature and does not take into consideration your objectives, financial situation or needs.

For loans between $2,050 and $5,000, the APR is between 21.24% (minimum) and 48% (maximum) per annum. Comparison rate of 65.4962%. Minimum term is 16 days and maximum term is 24 months. The cost of the loan is a $400 establishment fee and monthly interest charged on the amount borrowed. For example, a loan of $3,000 over 3 months with an APR of 48%, (comparison rate of 65.4962%), will have an establishment fee of $400, monthly repayments of $1,225.20. Total repayments of $3,675.60 and total interest payment of $275.60.

Warning: A comparison rate indicates the true cost of a loan. Comparison rates are true only for the examples provided and may not include all fees and charges. Different terms, fees or loan amounts might result in a different comparison rate.