What loan providers publish
| Loan provider | Prepayment / foreclosure | Source |
|---|---|---|
| Tata CapitalNBFC | 4% of future principal outstanding plus taxes, 30 days' notice | tatacapital.com |
| Shriram FinanceNBFC | Not published | shriramfinance.in shriramfinance.in |
| Cholamandalam FinanceNBFC | 5% of principal outstanding for pre-closure in months 7 to 12, 4% after 12 months, plus GST | cholamandalam.com |
| IDFC FIRST BankPrivate bank | Not published | idfcfirst.bank.in |
| J&K BankPrivate bank | None | jkbank.com |
| State Bank of IndiaPublic sector bank | Not published | sbi.bank.in |
| Hinduja Leyland FinanceNBFC | Not published | hindujaleylandfinance.com |
Checked 12 October 2026 on each loan provider's own website. "Not published" means the loan provider does not show that figure on the page we checked. We never estimate one. A starting rate is the best case, not the rate you will necessarily be offered, and these loan providers publish no JCB-specific rate: the terms are for construction equipment in general, which includes backhoe loaders.
What RBI's directions say
RBI's Pre-payment Charges on Loans Directions, 2025, in force from 1 January 2026, limit what banks and NBFCs can charge when you repay early. Their reach depends on the type of borrower and loan, and on whether the rate is floating or fixed, and business loans are treated differently from loans to individuals for personal use. We do not read them as a blanket rule for every JCB loan. Read the foreclosure clause in your Key Fact Statement and sanction letter, and ask the loan provider to state the charge in rupees for your loan.
When closing early pays off
Compare the interest you save with the charge you pay. A loan in its first years carries the most interest, so an early closing saves the most, but a charge of 4% or 5% on the outstanding principal can wipe out a year of savings. Part-prepayment, if allowed, can shorten the tenure. A simple test: multiply the outstanding principal by the charge, and compare it with the interest on the remaining months from the repayment schedule.
An example
An illustration: a ₹25,00,000 loan at an example 11% over 5 years, closed after 2 years, with an assumed 4% prepayment charge on the principal outstanding. Your terms will differ.
| EMI | ₹54,356 |
|---|---|
| Principal outstanding after 24 EMIs | ₹16,60,299 |
| Interest you would still pay over the last 36 months | ₹2,96,519 |
| Assumed 4% charge on the outstanding principal (plus tax) | ₹66,412 |
| Interest saved after the charge, before tax | ₹2,30,107 |
Closing early saves interest here, but the charge takes part of it. With no charge, the saving is the full interest figure.
Tips
- Ask for the foreclosure statement and the charge in rupees, in writing.
- Give any required notice, such as Tata Capital's 30 days.
- Do not stop paying EMIs while the foreclosure is processed.
- After closing, collect the closure letter and the no-objection document, and have the hypothecation removed. See registration and hypothecation.
Frequently asked questions
Is there a prepayment charge on a JCB loan?
It depends on the loan provider. J&K Bank states none. Tata Capital states 4% of future principal outstanding plus taxes, and Chola states 5% in months 7 to 12 and 4% after, plus GST. Read your sanction letter.
Can I part-pay a JCB loan?
It depends on the loan provider's policy. Ask whether part-prepayment is allowed, the minimum amount, and whether it reduces the EMI or the tenure.
Do RBI's 2026 prepayment rules apply to my JCB loan?
They apply in different ways to different borrowers and loan types. Read the foreclosure clause in your Key Fact Statement and ask the loan provider to state the charge.
How much notice is needed to foreclose?
It depends on the loan provider. Tata Capital says 30 days' prior notice. Ask yours.
KhatuLoans is not a loan provider and is not paid by the loan providers named here to rank them. Rates, fees and eligibility change; always confirm with the loan provider. Read our editorial policy and how we make money.