RBI Bans Loan Foreclosure Charges: What It Means for You

From 1 Jan 2026, no prepayment or foreclosure charges on floating-rate loans to individuals — any amount.

Covers home, personal and education loans, plus business loans to individuals and Micro & Small Enterprises.

No lock-in, part or full prepayment, and the money's source no longer matters.

Fixed-rate loans are NOT covered — lenders can still charge a penalty there.

Use it to refinance to a cheaper lender or prepay aggressively without a fee.