Loan repayment is the act of paying back previously borrowed money, such as personal loans, home loans or education loans. This repayment includes both the principle and interest. Not repaying for long period will result in bad debt and being called a delinquent by the authorities.

Sometimes, being able to change the mode of repayment of a loan could prove convenient toward repaying loans. To that end, we look at some ways to change the mode of repayment for a loan:

What are the different modes of loan repayment

Standing Instruction: In this mode, you give the lender (where you are already a customer with a savings account ) permission to access your account to withdraw the EMI owed to them by you automatically.

This method involves 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: This involves giving 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SI but a more traditional way where the cheque has to be physically sent to the borrower’s bank instead of the funds withdrawn electronically.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 is based on the same principle as SI where you’ll give the lender bank access to take the EMI from your account. The lender bank will then give the signed consent form and cancelled cheques to your banker, who will approve the transaction of EMI from your account. ECS can be used if you don’t have an account with your lender bank.

How to change your mode of loan repayment?

You have to begin by reaching out to the nearest bank branch and filling up a request form. Here’s the process to be followed for SI, ECS and cheques:

Standing Instructions

1. Request a form for swapping repayment instructions.
2. Three security cheques favouring ‘Lender Bank with Loan Account No.’ The cheques should be undated and filled with a value equal to the sum of three EMIs.
3. In case a bearer submits the request on your behalf, a bearer authorization along with KYC documents of the bearer, such as ID and signature proof (PAN Card, Aadhar Card, Driving License or Passport Copy) will also need to be provided.

Electronic clearing service

1. Request form for swap of repayment instructions.
2. Security cheques favouring ‘Lender Bank with Loan Account No.’
3. ECS mandate duly filled and verified by your banker.
4. Swap Charges of Rs.500/- favouring ‘Lender Bank with Loan Account No.’
5. 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 such as ID and signature proof (PAN Card, Aadhar Card, Driving License or Passport Copy) will also need to be provided.

Post dated cheques

(Only allowed if the location is non-ECS)

1. Request form for swap of repayment instructions
2. Revised post dated cheques in favour of ‘Lender Bank with Loan Account No.’ for the balance EMIs.
3. Swap charges of Rs. 500/- favouring ‘Lender Bank with Loan Account No.
4. 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, such as ID and signature proof (PAN Card, Aadhar Card, Driving License or Passport Copy) will also need to be provided.

When you take loans using the mPokket instant loan app, be it an education loan, a service loan, or a salary advance loan, timely repayments improve your CIBIL score, which will help you be eligible for larger loans and even improve your employment prospects.

That’s why, If you are seeking an instant student loan or salaried loan and wondering where to turn for some quick credit, simply Simply download the mPokket online loan app, register by uploading a handful of documents, and post the online loan approval, borrow instant personal loans of up to Rs. 30,000. mPokket loans for students and loans for salaried are both credited straight to your bank or Paytm account.

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