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How KKDF and BSMV Affect a Loan in Türkiye

Region: TürkiyeHesaplayıcı3 min read

Short answer

KKDF and BSMV are two levies Turkish banks add to each month's interest on consumer loans; each is 15% of the interest. The bank multiplies the monthly rate by 1.30 for the installment. For example, a 100,000 TRY loan at 3% a month for 12 months costs 10,046.21 TRY a month without them and 10,593.48 TRY with them.

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Formula

i = r × (1 + KKDF + BSMV)

monthly interest = remaining principal × r

KKDF = monthly interest × KKDF rate, BSMV = monthly interest × BSMV rate

  • r: the contractual monthly rate as a decimal (0.03 for 3%)
  • KKDF rate, BSMV rate: as decimals (0.15 for 15%)
  • i: the monthly rate with taxes; the installment is A = P × i / (1 − (1 + i)^(−n))
  • P: the loan amount; n: the term in months

KKDF (Resource Utilization Support Fund) and BSMV (Banking and Insurance Transactions Tax) apply to each month’s interest, not to the loan amount. As the principal and the interest fall, KKDF and BSMV fall too.

Step-by-step example

A 100,000 TRY personal loan at 3% a month for 12 months, KKDF 15%, BSMV 15%:

  1. Find the rate with taxes: 3% × (1 + 0.15 + 0.15) = 3.9%.
  2. Find the installment: 10,593.48 TRY. Without the taxes the rate stays at 3% and the installment is 10,046.21 TRY.
  3. Find the first month’s levies: interest 100,000 × 3% = 3,000 TRY; KKDF 3,000 × 15% = 450 TRY; BSMV 450 TRY.
  4. Read the totals: over 12 months, KKDF is 3,129.43 TRY and BSMV is 3,129.43 TRY.
  5. Compare the total repayment: 127,121.80 TRY with the taxes, 120,554.50 TRY without. The difference is 6,567.30 TRY (5.45%).

The difference is a little more than the two levies together. The taxes take part of each installment, so the principal falls more slowly and the interest grows: 20,554.50 TRY without the taxes, 20,862.94 TRY with them. The interest rate in the example is an illustration, not a market rate.

The tax load grows with the term

A 100,000 TRY loan at 3% a month:

Term Installment without taxes Installment with taxes Total KKDF Total BSMV Extra total repayment
12 months 10,046.21 TRY 10,593.48 TRY 3,129.43 TRY 3,129.43 TRY 6,567.30 TRY
36 months 4,580.38 TRY 5,215.68 TRY 10,126.76 TRY 10,126.76 TRY 22,871.41 TRY

The longer interest runs, the more KKDF and BSMV you pay. Over 36 months the taxes raise the total repayment by 13.87%.

Which loans carry them

  • Personal and vehicle loans (consumer loans). KKDF is 15% (Council of Ministers Decision 2010/974; Revenue Administration KKDF rate table). BSMV on consumer loans used from 7 July 2023 is 15% (Presidential Decision 7345, Official Gazette 7 July 2023, no. 32241). A vehicle loan to a private person for non-business use is a consumer loan.
  • Housing loans. BSMV is not charged to a consumer who owns no registered house on the loan date (Law 6802 art. 29/1-y as amended by Law 7491). On housing loans both rates are usually 0; check your bank’s payment plan.
  • Early repayment. When you close a loan early, the interest, KKDF and BSMV of the remaining installments are not charged (Law 6502 art. 27).
  • Credit cards. Banks add KKDF and BSMV to card interest as well; the credit card minimum payment calculation leaves them out.

Worked example: A 100,000 TRY consumer loan at 3% a month for 12 months

Monthly installment

10,593.48 TRY

Total repayment
127,121.8 TRY
Total interest
20,862.94 TRY
Total KKDF
3,129.43 TRY
Total BSMV
3,129.43 TRY
Monthly interest rate
3.00%
Monthly rate with taxes
3.90%
Step by step

  1. Monthly rate with taxes

    i = r × (1 + KKDF + BSMV)

    i = 3% × (1 + 15% + 15%) = 3.90%

  2. Monthly installment

    A = P × i / (1 − (1 + i)^(−n))

    A = 100,000 × 3.9% / (1 − (1 + 3.9%)^(−12)) = 10,593.48

  3. Total repayment

    total payment = sum of the installments

    total payment = 10,593.48 × 11 + 10,593.52 = 127,121.8

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