To amend the Rural Electrification Act of 1936 to permit the prepayment and refinancing of Federal financing bank loans made to rural electrification and telephone systems.

Amends the Rural Electrification Act of 1936 to permit prepayment and refinancing of Rural Electrification Administration guaranteed loans made to rural electrification and telephone systems if: (1) private capital is used for such prepayment; and (2) the borrower certifies that any savings incurred will be passed on to customers, used to improve the borrower's financial strength, or used to mitigate future rate increases.

Sets forth the interest rate for such loans. Prohibits any additional loan charges.