ACH
ACH (Automated Clearing House) is the electronic funds transfer network that handles most US bank-to-bank transactions, including direct deposits, bill payments, and loan disbursements. ACH transactions typically take 1 business day to settle (next-day ACH) or a few hours (same-day ACH). It's the system most online lenders use to fund loans and collect payments.
ACH is the plumbing of US bank transfers. When an online lender funds your loan, when your employer direct-deposits your paycheck, when your mortgage company auto-debits your payment: those are all ACH transactions.
How ACH timing works
ACH transactions settle on a fixed schedule:
- Standard ACH: typically 1 business day from initiation to settlement. Most lenders use this.
- Same-day ACH: introduced in 2016. Settles same business day if submitted before specific cutoffs (10:30 am ET, 1:30 pm ET, or 3:45 pm ET windows). Some lenders charge extra for this.
- No weekend or holiday processing: ACH operates only on business days. A Friday afternoon transaction often doesn’t post until Monday or Tuesday.
This is why “next business day funding” can mean different things in practice. See our guide on how fast online loans fund for the timing details.
ACH credits vs ACH debits
- ACH credit: money flowing into your account (loan disbursement, paycheck, refund)
- ACH debit: money flowing out of your account (loan payment, bill auto-pay)
Most subprime online loans are repaid via ACH debit: the lender pulls the payment from your bank account on the scheduled date. If the account doesn’t have enough money, the ACH is returned (NSF), which triggers fees from both your bank and the lender.
Returned ACH
When an ACH debit fails, the recipient typically attempts to re-pull within a few business days. Multiple failed attempts compound the fees. If you know a payment is going to fail, contacting the lender before the attempt to negotiate a different date is usually cheaper than letting the NSF cycle play out.