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What is a direct debit?
When you set up a direct debit, you’re giving permission for a business or service provider to collect bill payments automatically from your current account.
Each month you could have several payments to make on different dates. With direct debits in place, there’s less chance of you missing or making late payments.
Direct debit pros and cons
Before setting up a direct debit, it’s important to consider if it’s the right option for you.
The content on this page is for reference and does not constitute financial advice. For impartial financial advice, we recommend government bodies like the Money Advice Service.
Managing your direct debits
If there are direct debits on your Lloyds current account, it’s easy to manage them with us online, over the phone, or in branch.
Make sure you cancel at least one full day before your direct debit is due to be collected. Any less than that and your payment could still be claimed.
If you don’t see an option to cancel your direct debit online, or you receive an error message, contact the relevant company or service provider direct.
Once you’ve cancelled a direct debit, always let the relevant company or service provider know. If you still owe money for something you’ve bought, or a service you’re using, they’ll be able to give you information about other payment options.
Money shouldn’t be collected from your current account once a direct debit has been cancelled. If you see that a payment does go out, contact us for support.
Let’s look at the details
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Direct debits are usually collected on working days only. If your payment date falls on a weekend or bank holiday, it’ll be collected on the next working day.
There’s no set time for payments to leave your account, but early morning is quite common.
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While they both help you to make recurring payments, direct debits and subscriptions are different things:
Direct debits involve an instruction or mandate, with payment claimed direct from your current account. Once in place, you can usually cancel a direct debit by contacting your bank. Payments are protected by the Direct Debit Guarantee.
Subscriptions are usually paid by debit card and managed directly with the service provider. Subscription payments aren’t protected in the same way as direct debits.
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Direct debits are usually set up through a third-party business or service provider. To send regular payments to a friend or relative, you might like to set up a standing order instead.
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A direct debit could fail if:
- there are insufficient account funds
- the account details provided are no longer valid
- you or your bank have cancelled the payment instruction.
Your bank will usually contact you if a direct debit fails, giving you a chance to move funds to your account before they try the payment again.
If a direct debit payment bounces it could result in fees being charged by your bank, and the company or service provider you’re paying. Missing payments regularly could also negatively affect your credit score.
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While they both help you to make recurring payments, direct debits and standing orders are different things:
Direct debits are set up by a business or service provider you’ve authorised to claim payments on an agreed date each month. The payment amount can change month to month.
Standing orders are set up by you, directly with your bank. You’ll set a fixed amount and payment frequency.
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