Loan Restructuring (Refinancing) Calculator

See how much you can save by refinancing your existing loan with a lower interest rate or longer term.

Note: This calculation is based only on principal and interest. Taxes and additional fees such as KKDF and BSMV are not included.

Warning: This tool is for informational purposes only. For exact rates and commissions, contact your bank.

Loan Restructuring (Refinancing): What It Is, How to Calculate, and When It’s Useful

Restructure your existing loan under better terms

Loan restructuring, commonly known as refinancing, is a method to reduce your total cost or monthly burden by renegotiating your existing loan with a lower interest rate, longer term, or both.

In This Guide:

  • What is refinancing?

  • How is it calculated?

  • When is it beneficial?

  • What is an early repayment fee?

💡 Tip: Want to calculate immediately? Use our Loan Restructuring Calculator at the top of the page to see your new monthly installment and total savings in seconds!

What is Loan Restructuring (Refinancing)?

Refinancing is the process of paying off your existing loan with a new loan under more favorable terms, such as lower interest rates or longer repayment periods. This process is usually done to:

  • Take advantage of lower interest rates

  • Reduce monthly payments

  • Lower total repayment cost

Example:

  • Remaining balance: 100,000 TL

  • Current monthly interest: 2.25%

  • Remaining term: 48 months

  • New offer: 1.75% monthly interest, 60 months term

In this case, your monthly payment decreases, total payment may decrease or increase, but your cash flow improves.

How to Calculate Refinancing

Refinancing is calculated by comparing two different repayment plans:

  1. Calculate the monthly installment and total repayment for the existing loan.

  2. Calculate the monthly installment and total repayment for the new loan.

  3. Compare the two to evaluate savings.

Calculation Formula (Equal Installments – Annuity):

Monthly Payment=K⋅r(1+r)n(1+r)n−1\text{Monthly Payment} = K \cdot \frac{r(1+r)^n}{(1+r)^n – 1}

Where:

  • KK = Remaining principal

  • rr = Monthly interest rate

  • nn = Remaining term in months

When is Refinancing Beneficial?

Refinancing may be advantageous in the following situations:

  • Interest rates have dropped

  • Monthly payment burden is high

  • Extending the loan term can ease cash flow

  • Combining multiple loans for easier management

⚠️ Attention: Refinancing may involve an early repayment fee (usually up to 2%). This cost should be evaluated against potential savings.

What is an Early Repayment Fee?

Some banks charge an early repayment fee (also called prepayment penalty) for closing a loan before its term. This fee may be up to 2% of the remaining principal.

💡 Note: As of 2023, new loan agreements cannot include early repayment fees. However, older agreements may still apply.

Frequently Asked Questions (FAQ)

Which banks can I apply to for refinancing?
You can refinance with your current bank or a different bank.

Does refinancing affect my credit score?
No, it does not have a negative effect. Proper management can even improve it.

Can vehicle and personal loans be refinanced?
Yes, all loan types including mortgage, vehicle, and personal loans can be refinanced.

Is refinancing only about interest rates?
No, it can also involve extending the term or combining multiple loans.

Conclusion: Make Your Refinancing Decision Wisely

Loan restructuring is an effective way to improve your financial situation. However:

  • Carefully review new interest and term conditions

  • Consider additional costs such as early repayment fees

  • Compare total repayment costs

🏦 Warning: This calculator is for informational purposes only. Contact your bank for exact rates.