Repayment is defined as the act of paying back previously borrowed money in the form of loans which could be personal loans, home loans or education loans. The repayment includes both the principle and interest, the result of not repaying after a point of time will result in the borrower falling into bad debt and being called a delinquent.

Different Mode of Loan Repayment

Standing Instruction (SI): Standing instructions is where you give the lender where you are already a customer with a savings account, to access your account to withdraw the EMI owed to them by you automatically. There is no hassle or procedure each month. You can also specify on which date the lender can withdraw the EMI. You need to keep your account funded to make sure the EMI payment is not missed when the bank tries to withdraw the EMI. This way you will not miss any payments.

Post-Dated Cheques (PDCs): This is the scenario where you give post-dated cheques equalling the loan tenure to the lender which they will submit to the bank on the date specified on the cheque. This is not available in all areas. It is also like SI but a more traditional way where the cheque has to be physically sent to the borrower’s bank instead of the funds withdrawn electronically.

Electronic Clearing Service (ECS): This mode can be used if you don’t have an account with your lender bank. It follows the same principle as that of SI where you the borrower will give the lender bank access to take the EMI from your account. The lender bank will give the signed consent form and cancelled cheques to your banker who will approve the transaction of EMI from your account.

How to change your mode of repayment

There could be times when you would want to change your mode of repayment from those mentioned above and there could be multiple reasons for the same. Lenders do have specific processes to facilitate this transfer request.

Usually this involves reaching out to the nearest bank branch and filling up a request form.

1) Standing Instructions:

In case you want to change the mode of paying from ECS or Post-Dated Cheques to Standing Instructions.

Please submit the following at your nearest Retail Loan Service Centre:

  • Request form for swap of repayment instructions.
  • 3 Security cheques favoring "Lender Bank with Loan Account No.", each undated and filled with a value equal to the sum of 3 EMIs.
  • In case a bearer submits the request on your behalf, a bearer authorization along with KYC documents (self-attested copy and original for validation) of the bearer, i.e. Identity and Signature Proof like PAN Card, Aadhar Card, Driving License or Passport Copy will also need to be provided.

2) Electronic Clearing Service (ECS):

In case you want to change the mode of paying from Standing Instructions or Post-Dated Cheques to ECS.

Please submit the following at your nearest Retail Loan Service Centre:

  • Request form for swap of repayment instructions.
  • Security cheques favoring "Lender Bank with Loan Account No."
  • ECS mandate duly filled and verified by your banker.
  • Swap Charges of Rs.500/- favoring "Lender Bank with Loan Account No.”
  • In case a bearer submits the request on your behalf, a bearer authorization along with KYC documents (self-attested copy and original for validation) of the bearer, i.e. Identity and Signature Proof like PAN Card, Aadhar Card, Driving License or Passport Copy will also need to be provided.

Security Cheques: You need to issue 1 security cheque for every 6 Equated Monthly Installments (EMI). The amount on each security undated cheque should be equal to the sum of 3 EMIs. For example, if your EMI amount is Rs. 1000 and you have paid 18 EMIs for a 36-month loan tenure, you need to submit 3 Security Cheques of Rs. 3000 each.

3) Post-dated Cheques (This mode is allowed only if the location is non ECS):

In case you want to change the mode of paying from Standing Instructions or ECS to Post-Dated Cheques.

Please submit the following documents at your nearest the Retail Loan Service Center:

  • Request form for swap of repayment instructions
  • Revised postdated cheques in favor of "Lender Bank with Loan Account No." for the balance EMIs.
  • Swap Charges of Rs.500/- favoring "Lender Bank with Loan Account No."
  • In case a bearer submits the request on your behalf, a bearer authorization along with KYC documents (self-attested copy and original for validation) of the bearer, i.e. Identity and Signature Proof like PAN Card, Aadhar Card, Driving License or Passport Copy will also need to be provided.

The Application Form

The application form will consist of details like from which mode of repayment do you want to switch which mode of repayment. You will have to give details about any Post-dated cheques provided for PDC payment or security cheques in case of ECS payment along with date of issuance cheque numbers and bank details.

Once your old payment details are provided you will need to fill an acknowledgement form with details of the new payment option you want to switch to.