Loan Prepayment Penalty: Is It Still Applicable in 2025? Everything Borrowers Need to Know Before Repaying Early
Loans have become an inseparable part of modern financial life. Whether you’re buying a home, funding education, purchasing a car, or managing unexpected expenses, loans help bridge the gap between needs and financial capability. However, once the loan is taken, the monthly burden of EMIs (Equated Monthly Installments) can become overwhelming for many. Now, let’s say your financial situation improves — you get a bonus, a lump sum payment, or a windfall gain — and you want to repay your loan early to become debt-free. That sounds like a smart move, right? But is early loan repayment truly beneficial ? Could you face prepayment penalties ? What do the latest bank rules say ? In this article, we’ll explore the key rules surrounding loan prepayment , whether penalties still apply, and how you can make a financially sound decision. What Is Loan Prepayment? Loan prepayment refers to the repayment of your outstanding loan amount before the scheduled loan tenure ends. It can be done in t...