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Can a user use a mandate having a lower amount for a loan with a higher amount?
No, they can’t. A user can only take a loan that falls within the limit of the mandate they’ve authorized. This mandate is what gives the lender permission to automatically debit the borrower’s account when it’s time to repay. So if they’re trying to access a higher loan amount, they’ll need to set up a new direct debit mandate that matches or exceeds the new loan size. Without this, the lender has no legal or technical backing to recover the full repayment, which puts both the borrower and the lender at risk.
This helps protect lenders by making sure that repayment mandates are valid for the exact loan size being disbursed. If a borrower’s existing mandate only covers ₦100,000 and they apply for ₦250,000, the system will block the disbursement until a new one is created reducing the risk of failed debits and unpaid loans.
For instance, A borrower previously authorized a ₦150,000 Remita mandate but later applies for a ₦300,000 loan. The loan is flagged because it doesn’t cover the new amount. The lender notifies the borrower to update their mandate and once it’s done, the loan is disbursed. This ensures the lender has full repayment authorization and avoids any surprises on the due date.
