RBI has instructed banks not to levy prepayment penalty to the loans taken on floating interest rate. Hence if you had taken a business loan with floating interest rate, you can prepay the entire loan without having to worry about prepayment penalty.

If your business loan is taken with fixed interest rate, it is better to think twice before prepaying the loan. Prepayment penalty of up to 5% will be charged. In case you are in the final stage of loan repayment, prepaying the business loan will be of no use.