No Foreclosure Charges: RBI's 2026 Loan Prepayment Rule

From Jan 1, 2026, no prepayment or foreclosure charges on most floating-rate loans to individuals and MSEs.

Applies regardless of source of funds, part or full payment, with no lock-in period.

Only loans sanctioned or renewed on or after Jan 1, 2026 qualify automatically.

Fixed-rate loans and large company borrowers are still outside the exemption.

MSE business loans up to Rs 50 lakh are covered even at smaller lenders.