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.
RBI Prepayment Charges: 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 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 people who prepare to repay their loan early.
At present, banks or loan giving companies charge many types of charges in the name of pre-payment charge on repaying the loan before the stipulated time. However, now according to the RBI rule, 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, there will be no prepayment charge. There will be no lock-in period for this.
What is RBI’s new rule?
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
Information was given by the Reserve Bank that the loan giving institutions were charging as per their wish in the name of their pre-payment charge. Due to which the customers were facing many problems. It was also seen that some companies were imposing such terms and conditions, after which 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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