Monthly draft on a closed loan

Tips, tricks and solutions for using the AutoPay System with your loans.
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wtech_josh
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Posts: 80
Joined: Tue Jul 30, 2019 7:17 pm

Monthly draft on a closed loan

Post by wtech_josh »

I closed out a paid-off loan this month but I see there is still a draft that took place after the loan was closed. What did I do wrong there?
wtech_josh
Site Admin
Posts: 80
Joined: Tue Jul 30, 2019 7:17 pm

Re: Monthly draft on a closed loan

Post by wtech_josh »

The AutoPay system isn’t perfect yet. It’s still in beta, and I’m going to do a complete overhaul once I get the back-end stuff with the bank ironed out. Here’s all the things to consider at the end of a loan with AutoPay in its current form.

AutoPay will stop scheduling recurring payments when the loan balance is updated to zero. The recurring system schedules payments about five days in advance so it has time to send out reminder emails for the upcoming payment, and for borrowers and lenders to act on those reminders if the payment needs to be changed or cancelled before it goes into processing. If a loan is closed after the next payment is already scheduled, the payment is not automatically cancelled although the recurrence is effectively stopped since the balance will stay at zero thereafter. The recurrence continues to follow the recurrence rule, but never schedules any payments – so actually cancelling the recurring from the AutoPay window in Moneylender is always a smart thing to do.

And while you’re in that window, if you see any payments coming up that are marked “Pending”, delete them. A payment might have been created a while ago or scheduled by the recurrence system, but if you don’t want any more money from the borrower, cancel any pending payments to prevent them from processing.

Your local copy of Moneylender is the authority on what the loan balance is. When the loan recomputes, Moneylender will connect to the AutoPay server to update the balance. Only after AutoPay receives notice from your Moneylender does it know that the balance is zero, so if a loan isn’t closed out for a while, the recurrence system won’t know that you’re planning on closing the loan soon. If your computer isn’t connected to the internet, or has trouble communicating with the AutoPay server, you might update the balance, but the balance isn’t yet synchronized to AutoPay. Moneylender will try again after a while until it successfully updates the loan balance on the AutoPay system. If there are delays in notifying AutoPay that a loan is closed, a recurring payment might get scheduled – so it’s always good to cancel the recurrence directly.

When you open the AutoPay window from the Payments tab, your Moneylender is actually pulling the payment data directly from the AutoPay server. So cancelling payments and recurrences are certain to have been cancelled at the source.


The 15th of November was especially troublesome because the system sends emails 4 days ahead of the payment dates. A few months back, my bank asked me to star batching two business days early instead of one, which is not the timing AutoPay was designed around. Recurrences schedule the payments five calendar days before the payment date, then AutoPay sends reminders at 10:30 AM EST the following day, and then the payment goes into processing two business days before the scheduled payment date. The 11th was Veteran’s Day, and the 13th and 14th were weekend days, so payments for Monday the 15th went into processing on Wednesday the 10th. That meant the reminder emails didn’t get into the borrower’s inboxes until the payments were already in processing. That’s not how I want the system to function.


Payments for loans with a $0 balance are marked in a different color when I run the batch so they stand out. I might make it an informal policy going forward that I manually cancel those payments instead of letting them process. I think almost all of those payments (perhaps five or six over the last three years) were unintended.


So that’s the very long story of closing a loan that is connected to AutoPay. Take a second to cancel the recurrence and any upcoming payments and you’ll save yourself the hassle. In the next year or so, I hope to get to rewrite the system and it’ll ask you directly to cancel things as part of the closing wizard.
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