Partial debit occurs when only a portion of the available funds in a financial account is used to cover a purchase or payment. This happens when the account balance is too low to cover the full amount. In such cases, the transaction proceeds with the available funds, and the remaining balance is paid using another method.
How It Works
Sometimes, borrowers don’t have enough money in their debit accounts to meet loan payments. Partial debiting helps lenders recover loan amounts even if the borrower doesn’t have the full sum.
This system relies on smart algorithms that identify and debit available funds from accounts with low balances. While full repayment can’t be guaranteed, this method supports lenders in maintaining efficient loan recovery.
Example
If a borrower owes N5000 but has only N3000 in their debit account, the system will debit N3000. It will repeat this process until the full loan is repaid.
Read also: HES Fintech vs Turnkey Lender: Which loan software is best for you?
Read also: Can you choose direct debit mandate for loan repayment?