RBI Prepayment Charges: The Reserve Bank of India has given great news to the customers taking loans. Now no pre-payment charge will be levied on the floating rate loan approved on or after January 1, 2026 for repayment before time. That is, this decision of the Central Bank will come into effect from January 1, 2026.
The country’s central bank i.e. Reserve Bank of India (RBI) has given a big relief to the people taking loans. Now if you repay the home loan, business loan or other floating rate loan before time, then the bank or financial institution cannot charge you any kind of pre-payment penalty or charge. This rule will come into effect from January 1, 2026. Its biggest benefit will be to those who plan to repay their loan early.
At present, banks or loan lending companies charge various types of charges in the name of pre-payment charges if the loan is repaid before the stipulated time . However, now according to RBI rules, people will not have to pay such charges. RBI has clarified that if you repay the loan partially or fully, no matter from which source the payment is made, no prepayment charge will be levied. There will be no lock-in period for this.
What is the new rule of RBI ?
RBI has said that this charge will not be levied on home loans, personal loans, and other non-business loans. Big banks (Commercial Banks) will not charge any prepayment charge even on loans taken for business, which are given to an individual or small industry (Micro and Small Enterprises – MSEs).
Know why the Reserve Bank took this decision
The Reserve Bank informed that the loan giving institutions were charging as per their own will in the name of pre-payment charges. Due to which the customers were facing many problems. It was also seen that some companies were imposing such terms and conditions, due to which the customers could not take loans from other institutions or companies. Now after this announcement, businessmen can easily switch to low-interest loans. Along with this, the arbitrariness of financial institutions and banks will also be stopped.
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