It seemed strange to me that my lender asked for authorization to automatically withdraw money from my account. Is this legal? What kind of authorization is this ACH Authorization and is it possible to avoid granting it to the lender?
When you are applying for a payday loan, your lender will require you to sign the agreement that is known as an “ACH authorization” to accept the loan.
“ACH” stands for “Automated Clearing House.”
Simply put, when you provide a lender with this authorization for your bank or credit union account, you are giving them the legal right to pull the amount due on your loan plus interest from your account on the due date.
If you provide this authorization and change your mind, you are within your legal rights to submit an official revocation at any time. If you do this, the lender is no longer legally authorized to take money from your account.
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