Loan Calculation: Consumer Loans, Interest Rates, and Repayment Plans

If you want to take a loan, you’re in the right place.

A loan is the cash amount provided by banks or financial institutions to individuals or legal entities, which must be repaid after a certain period. Consumer loans are taken to cover personal needs such as weddings, vacations, education, or household appliances.

In This Guide:

• What is a loan?

• How is a loan calculated?

• What are interest, KKDF, and BSMV?

• How is a monthly repayment plan prepared?

• How to apply for a loan?

💡 Want to calculate right away? Use our Loan Calculator at the top of the page to determine your monthly installment in seconds!

What is a Loan?

A loan is money lent by banks or other financial institutions from the deposits and funds they collect, at a certain interest rate, to those in need for a specific period. This debt is generally repaid in equal installments using the annuity method.

How is a Loan Calculated?

Loan calculations are usually done using the equal installment (annuity) method, where each month the same amount is paid. The formula is:

$$\text{Monthly Installment} = K \cdot \frac{r \cdot (1+r)^n}{(1+r)^n – 1}$$

Where:

• K = Loan amount (currency)

• r = Monthly interest rate (Annual interest / 12 / 100)

• n = Term (months)

Example Calculation:

• Loan Amount: 50,000 TL

• Annual Interest Rate: 2.75%

• Term: 60 months (5 years)

$$r = 2.75 / 100 / 12 \approx 0.0022917$$ $$\text{Monthly Installment} \approx 921.87 TL$$

⚠️ Note: This calculation only includes the principal and interest. KKDF and BSMV taxes are added to determine the total monthly payment.

What are KKDF and BSMV?

In Turkey, two types of taxes/funds are applied on the interest portion of consumer loans:

1. KKDF (Resource Utilization Support Fund)

   • Deducted at 15% of the interest.

   • Housing and home renovation loans are exempt from KKDF.

2. BSMV (Banking and Insurance Transaction Tax)

   • Deducted at 5% of the interest.

   • Consumer loans (personal, car, etc.) are not exempt.

💡 Tip: These taxes increase the monthly installment, so include them when calculating your net monthly payment.

What is a Loan Term?

The term is the period over which the loan must be repaid. In Turkey:

• Consumer loans: 3 to 60 months (5 years)

• Housing loans: Up to 120 months (10 years)

Longer terms reduce monthly installments but increase total interest paid.

How to Apply for a Loan?

1. Online Application

   • Visit the bank’s website.

   • Fill in required information on the “Loan Application” page.

   • Upload documents (ID, salary slip, etc.).

2. Branch Application

   • Go to the nearest branch.

   • Submit ID, income statements, and other required documents.

3. SMS or Phone Application

   • Some banks accept applications via SMS for certain campaigns.

What is a Monthly Repayment Plan?

A repayment plan details:

• Term

• Interest rate

• Monthly installment

• KKDF and BSMV amounts

This plan is provided when you finalize the loan agreement with the bank.

How Much Loan Can You Get?

In Turkey, banks usually provide:

• Consumer loans: Up to 50,000 TL

• Housing loans: Up to 1.5 million TL

The exact amount depends on income, credit score, and existing debts.

Tips When Taking a Loan

• Compare Interest Rates: Look at the total cost, not just the rate.

• Check KKDF and BSMV: Taxes can increase your total cost.

• Early Repayment Fee: Some loans charge a fee if you repay early.

• Check Your Credit Score: Higher scores may get lower interest rates.

Frequently Asked Questions (FAQ)

Q: How is loan interest calculated?
A: Interest is based on the borrowed amount and the applied rate over the term. Monthly installments are calculated on this interest.

Q: What is the KKDF rate for consumer loans?
A: 15% on the interest portion. Housing and home renovation loans are exempt.

Q: What is the BSMV rate for consumer loans?
A: 5% on the interest portion. Consumer loans are not exempt.

Q: Difference between housing and consumer loans?
A:

• Housing loan: For buying, building, or renovating a home; may be exempt from KKDF/BSMV.

• Consumer loan: For personal needs; KKDF and BSMV apply.

Conclusion: Take Loans Wisely

Loans help you finance major life decisions. Before taking one:

• Evaluate your finances

• Calculate your repayment capacity

• Consider taxes and interest costs

• Make a long-term plan

🏦 Warning: This calculator is for informational purposes. Consult your bank for exact figures.