Foreclosure charges: when they cannot be charged at all
Floating-rate loans to individual borrowers for non-business purposes carry no prepayment penalty.
3 min read
What you need to know
RBI prohibits foreclosure charges and prepayment penalties on floating-rate term loans sanctioned to individual borrowers for purposes other than business. Fixed-rate loans, and many business-purpose loans, remain chargeable.
If your lender quotes a penalty on a floating-rate home loan in your personal name, ask them to point to the clause and the regulation. Usually they withdraw it.
Continue your research
Use this guide alongside our product details and eligibility criteria before choosing a lender.
Frequently asked questions
What is the main takeaway from “Foreclosure charges: when they cannot be charged at all”?
Floating-rate loans to individual borrowers for non-business purposes carry no prepayment penalty.
What should I check before acting on this tax & compliance guide?
Review the practical points in the guide against your income, obligations, documents and lender requirements.
Can the information in this guide guarantee loan approval?
No. It is general educational information. A bank or NBFC makes the final decision after checking your credit profile, repayment capacity, documents and the applicable product policy.
How can iFINTRUST help after I read this guide?
An iFINTRUST advisor can review your requirement, explain the documents normally requested and help you compare suitable lending options before you apply.