How to require direct debit mandate creation during user onboarding

A direct debit mandate is a user’s authorization that allows a lender to automatically deduct loan repayments from their bank account on agreed dates. Requiring this mandate during user onboarding ensures that repayment is automated, consistent, and secure, reducing reliance on manual reminders or user-initiated transfers.

If your organization uses direct debit for payments, you may want to require new users to provide a direct debit mandate when signing up. This streamlines collections, improves cash flow predictability, and enhances borrower accountability from day one.

For instance, when onboarding a new customer, you can require them to authorize a direct debit mandate linked to their bank account. Once the loan is approved and disbursed, repayments are automatically deducted based on the agreed schedule. If a borrower receives salary payments or regular inflows, the system ensures timely deductions without needing the borrower to take any manual steps. 

Here are the steps to enable this requirement in the Lendsqr app:

1. Log into your Lendsqr admin console and navigate to the Preferences

2. Click on System Configurations.

3. Select Organization Settings from the options that appear.

4. Click the setting labeled Require Direct Debit Mandate During Onboarding.

5. This will open up the setting’s value, which is a JSON object: {“require_mandate”:true,”mandate_amount”: 1000000}

6. Change the value of “require_mandate” from false to true by modifying the text to: {“require_mandate”:true,”mandate_amount”: 1000000}

7. You can also edit the amount at your discretion,the “mandate_amount” value specifies the maximum amount that can be debited with the mandate.

8. Click “Create” to save the new setting value.

9. Click “Close” to exit the modal.

With this configuration updated, any new users signing up will have their mandate automatically set up as they onboard to borrow from you..

Requiring the mandate upfront makes payments convenient and provides your organization with proper authorization to debit user accounts for any loan repayment. 

Be sure to make users aware of this requirement during the sign up process.

Learn how to create a mandate here

Also read: Are you still chasing payments? Direct debit can turn your loan collections around