Home Loan Prepayment Rules — Bank-by-Bank Comparison India 2026
Under RBI's 2014 circular, no scheduled bank or housing finance company can charge prepayment or foreclosure penalties on floating-rate term loans to individual borrowers. Fixed-rate loans, however, may still attract charges of 2-4% depending on the lender. Below is a side-by-side comparison of prepayment rules across all 15 major Indian banks and HFCs, verified as of early 2026.
Prepayment Rules Comparison Table
| Bank | Type | Floating Penalty | Fixed Penalty | Part-Payment Limit | Notice Period |
|---|---|---|---|---|---|
| SBI | PSU | Nil | Nil | No explicit cap for standard home loans | No formal notice for most digital part-payments |
| HDFC Bank | Private | Nil | Yes | Varies by scheme; generally no hard cap on floating retail loans | Typically prior request for branch-led processing |
| ICICI Bank | Private | Nil | Yes | As per product terms; often no cap for floating individual loans | 1-7 working days for request processing in many cases |
| Axis Bank | Private | Nil | Conditional | Scheme dependent; check sanction letter | Usually prior intimation preferred for large part-payments |
| Bank of Baroda | PSU | Nil | Conditional | No universal cap; verify product terms | Written request may be asked for branch mode |
| LIC HFL | HFC | Nil | Yes | As specified in sanction terms | Advance request generally required |
| PNB Housing | HFC | Nil | Yes | Product specific limits may apply | Prior service request recommended |
| Kotak | Private | Nil | Conditional | As per agreement and repayment mode | Usually 7-30 days for full foreclosure requests |
| Canara Bank | PSU | Nil | Conditional | Generally flexible; verify sanction terms | No strict notice for part-payments in many branches |
| Union Bank | PSU | Nil | Conditional | No common cap across products | Written intimation may be required for closure |
| PNB | PSU | Nil | Conditional | Typically flexible for retail floating loans | Branch-led foreclosure may need prior request |
| Indian Bank | PSU | Nil | Conditional | No universal annual cap stated | Usually no formal notice for part-payment transfers |
| Bank of India | PSU | Nil | Conditional | Policy varies by product/scheme | Advance request may be requested for account closure |
| IDBI Bank | Private | Nil | Conditional | As per approved sanction terms | Request lead time may apply for foreclosure |
| Bajaj Housing | HFC | Nil | Yes | Product-specific limits may apply | Advance request typically required for foreclosure |
Bank-Wise Summary
State Bank of India
PSUFloating rate: Nil penalty. Fixed rate: Nil — No prepayment or foreclosure penalty as per manually verified SBI terms document. Part-payment limit: No explicit cap for standard home loans.
Read full SBI rules →HDFC Bank
PrivateFloating rate: Nil penalty. Fixed rate: Yes — Charges may apply on fixed-rate products as per sanction terms. Part-payment limit: Varies by scheme; generally no hard cap on floating retail loans.
Read full HDFC Bank rules →ICICI Bank
PrivateFloating rate: Nil penalty. Fixed rate: Yes — Fixed-rate products may attract prepayment charges. Part-payment limit: As per product terms; often no cap for floating individual loans.
Read full ICICI Bank rules →Axis Bank
PrivateFloating rate: Nil penalty. Fixed rate: Conditional — Applicable charges depend on product and funding source. Part-payment limit: Scheme dependent; check sanction letter.
Read full Axis Bank rules →Bank of Baroda
PSUFloating rate: Nil penalty. Fixed rate: Conditional — Fixed-rate/pre-closure charges may apply as per agreement. Part-payment limit: No universal cap; verify product terms.
Read full Bank of Baroda rules →LIC Housing Finance
HFCFloating rate: Nil penalty. Fixed rate: Yes — Fixed-rate foreclosure/part-prepayment charges may apply. Part-payment limit: As specified in sanction terms.
Read full LIC HFL rules →PNB Housing Finance
HFCFloating rate: Nil penalty. Fixed rate: Yes — Fixed-rate products may carry charges. Part-payment limit: Product specific limits may apply.
Read full PNB Housing rules →Kotak Mahindra Bank
PrivateFloating rate: Nil penalty. Fixed rate: Conditional — Charges may apply based on fixed-rate loan terms. Part-payment limit: As per agreement and repayment mode.
Read full Kotak rules →Canara Bank
PSUFloating rate: Nil penalty. Fixed rate: Conditional — Fixed-rate charges depend on applicable home loan scheme. Part-payment limit: Generally flexible; verify sanction terms.
Read full Canara Bank rules →Union Bank of India
PSUFloating rate: Nil penalty. Fixed rate: Conditional — Fixed-rate prepayment terms apply as per sanctioned facility. Part-payment limit: No common cap across products.
Read full Union Bank rules →Punjab National Bank
PSUFloating rate: Nil penalty. Fixed rate: Conditional — Charges depend on fixed-rate product terms. Part-payment limit: Typically flexible for retail floating loans.
Read full PNB rules →Indian Bank
PSUFloating rate: Nil penalty. Fixed rate: Conditional — Fixed-rate foreclosure terms as per sanction document. Part-payment limit: No universal annual cap stated.
Read full Indian Bank rules →Bank of India
PSUFloating rate: Nil penalty. Fixed rate: Conditional — Fixed-rate charges may be applicable based on contract. Part-payment limit: Policy varies by product/scheme.
Read full Bank of India rules →IDBI Bank
PrivateFloating rate: Nil penalty. Fixed rate: Conditional — Fixed-rate part-prepayment/closure charges may apply. Part-payment limit: As per approved sanction terms.
Read full IDBI Bank rules →Bajaj Housing Finance
HFCFloating rate: Nil penalty. Fixed rate: Yes — Fixed-rate products may attract prepayment charges as per terms. Part-payment limit: Product-specific limits may apply.
Read full Bajaj Housing rules →Frequently Asked Questions
Can banks charge prepayment penalty on floating rate home loans?
No. As per RBI circular DBOD.No.Dir.BC.107/13.03.00/2013-14, banks and HFCs cannot levy foreclosure or prepayment charges on floating-rate term loans given to individual borrowers. This applies to all scheduled commercial banks and housing finance companies.
Do fixed-rate home loans have prepayment penalties?
Yes, many banks charge 2-4% of the outstanding principal for prepaying fixed-rate home loans. The exact penalty varies by lender and is specified in your sanction letter. Some banks like SBI do not charge even on fixed-rate products.
Is there a minimum amount for part-payment?
Most banks do not have a formal minimum for part-payments, but some may require the amount to be at least one EMI or a minimum of ₹10,000-₹25,000. Check your loan agreement for specific terms.
How many times can I make part-payments in a year?
There is no universal limit set by RBI. Most banks allow unlimited part-payments on floating-rate loans. Some HFCs or fixed-rate products may restrict the frequency or total amount per year.
Should I reduce EMI or tenure after prepayment?
Reducing tenure saves more interest in the long run because you pay off the principal faster. Reducing EMI improves monthly cash flow but results in higher total interest paid. Most financial advisors recommend tenure reduction if affordability is not a concern.
When is the best time to make a prepayment?
Earlier prepayments save more interest because the outstanding principal is higher in the initial years. A ₹5L prepayment in year 3 saves significantly more than the same amount in year 15. Aim to prepay during the first half of your loan tenure.
Calculate Your Prepayment Savings
Use the home loan prepayment calculator to estimate how much interest and tenure you can save.
This page is for informational and educational purposes only. Prepayment rules and charges may change. Always verify terms with your bank or check your sanction letter before making prepayment decisions. Data last verified across all banks: February 2026. Please consult a SEBI-registered financial advisor before making investment decisions.