A mandate is a payment mechanism that automatically makes your interest payments from your bank account. You can create a UPI eMandate through your linked bank account on the Zerodha Capital dashboard. Once set up, your monthly interest payable is debited automatically on the 2nd of every month.
Steps to create a mandate
Log in to Zerodha Capital.
Go to the Mandates tab, or enable auto-debit from the Dashboard.
Click Create new mandate.
Confirm the bank details.
Scan the QR code in your UPI app.
Enter your UPI PIN to set up the auto-debit.
Points to keep in mind
If your balance is insufficient on the 2nd, the debit is retried on the 4th and 6th of the month. Maintain sufficient balance before the debit date to avoid payment failures.
Only the interest amount is debited through auto-debit. Principal repayment has to be made from the dashboard.
Once set up, a mandate cannot be deleted. It is cancelled automatically once the loan is closed.
NPCI allows a maximum of Rs. 15,000 per day for mandates without needing you to enter the UPI Pin. If your interest payable is up to Rs. 45,000, it is debited in two installments, on the 2nd, 4th and the 6th.
Whenever you create a mandate, Rs. 1 is deducted to activate it. This amount is credited to your loan account as a repayment.