If your bank account is not sufficiently provisioned when a direct debit occurs (the funds available do not allow to honor a payment), then the bank can reject this direct debit. Reason: insufficient balance. This is the case even if your finances are not in the red, but the payment would switch your account beyond the overdraft authorized in certain banks.
This situation leads to costs (rejection costs) and a deadlock situation with your creditor (who therefore does not receive his money). Are direct debit rejections a reason for banks to refuse to grant you a loan? No.
Payment incidents are not blocking to obtain a bank loan
It is never good to have rejections of transfers or direct debits, but also checks refused for lack of funds. These situations constitute payment incidents for financial organizations. As a result, in the event of an incident, sanctions and costs are to be expected. The best solution, react, and quickly.
Note that banks are not required to inform you in the event of an incident, or of the intention to reject a direct debit, or of the actual decision to reject it. This is why, very often, it is by consulting your account that you will have the unpleasant surprise of discovering the problem. React because if you do not honor the direct debit, in addition to bank charges (capped by law at 20 $), an incident may lead you to be registered in the private files of the bank concerned, or even in the incident file of reimbursement of loans to individuals (FILP), in case of arrears relating to credit maturities.
A payment incident is in no way blocking getting a loan, provided that it is settled, and that it is not a habit. Indeed, to grant you a consumer loan, or to help you finance a real estate project, a bank will not trust you if your account has regular incidents. Likewise, in the context of a grouping of loans, a loan repurchase organization may not be able to make you a complete proposal if it considers that you have a “risky” profile. The solution ? To anticipate.
Solutions to avoid rejection of direct debits
To avoid the phenomenon of gear, which can make you pass from a simple payment incident to a banking ban heavy with consequences, show anticipation.
- Notify your banker and discuss with him the possibilities of adjusting your authorized overdraft. It is entirely possible to modify the amount of your authorized overdraft up or down for a given period. Thus, if you have to face a one-off financial problem or an unforeseen event that plunges you into the red, you can avoid the costs. This dialogue will be well seen on the part of your banker, and will prove your good faith;
- Adjust the means of payment you have according to your needs. If you tend to be big on spending, then ask for a systematically authorized payment card. This will only work if the account is sufficiently provisioned. Also remember to prefer immediate debit cards. With deferred debit, you will sometimes tend to forget certain expenses, which will be remembered when they are withdrawn … surprise!
- Track your account on a regular basis. Most banks now offer remote monitoring tools for your accounts. You can check your balance very quickly, and even set up customizable alerts to alert you if something goes wrong. Use these services to avoid unpleasant surprises.
If, despite all of this advice, payment rejections and in particular direct debit rejections multiply, resulting in a reluctance on the part of the bank to grant you credit, all is not lost. You will then have to consider a more complete solution, and carry out a real restructuring of your debts, with why not a repurchase of credit.