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With home loan interest rates rising to almost 9%, a lot of you are thinking of pre-paying your loan.

But you'd be worried about any prepayment or foreclosure penalties that banks may charge you because they can be as high as 2-4% of the outstanding loan amount.

But I have some good news for you. If you've got a floating-interest home loan, banks CANNOT charge you any penalty fees for prepaying or closing the loan before its tenure.

This is as per an RBI circular dated 2019, 2014 and 2012, where India's Reserve Bank clarified that banks cannot ask you to pay any foreclosure or pre-payment charges.