NACH Mandate
National Automated Clearing House — a system that auto-debits your EMI from your bank account.
Apply for a LoanWhat is NACH Mandate?
NACH (National Automated Clearing House) is an electronic clearing system operated by NPCI (National Payments Corporation of India) that allows lenders to automatically debit your EMI from your bank account on the due date every month. When you take a loan, you sign a NACH mandate authorising this auto-debit. This ensures timely repayment without manual transfers. Bouncing a NACH mandate (insufficient balance) attracts a bounce charge and is reported as a late payment to CIBIL.
Example
Your home loan EMI of ₹18,500 is due on the 5th. NACH mandate auto-debits ₹18,500 from your savings account every 5th. If your account has only ₹15,000 on that date, the NACH bounces — the lender charges ₹500–₹1,500 bounce fee and your CIBIL reflects a missed EMI.
Frequently Asked Questions
What happens if NACH mandate bounces?
If your NACH mandate bounces (account has insufficient funds): (1) Lender charges bounce fee of ₹500–₹1,500 + GST; (2) EMI is considered unpaid for that day — starts accruing DPD (Days Past Due); (3) After 30 days, the lender reports 30 DPD to CIBIL; (4) Lender typically makes 2–3 NACH presentation attempts in the same month. Best practice: keep a buffer of 2 months' EMI in your linked savings account. Set a reminder 2 days before due date to ensure sufficient balance.
Can I change the bank account linked to NACH mandate?
Yes — you can change the bank account for NACH after the loan is sanctioned. Process: submit a mandate cancellation request for the old account + new mandate form for the new account to the lender. This takes 7–15 working days. During this transition, pay EMI manually via NEFT/RTGS to avoid missing a payment. Some lenders process this digitally through net banking. Ensure the new account has sufficient balance from the first auto-debit date.
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