How to Calculate a Loan Installment in Türkiye
Region: TürkiyeHesaplayıcı3 min read
Short answer
A loan installment is the fixed amount you pay each month on an equal-installment bank loan. Turkish banks add KKDF and BSMV to the monthly rate and use the annuity formula. For example, a 100,000 TRY personal loan at 3% a month for 12 months has a 3.9% rate with taxes and an installment of 10,593.48 TRY.
Formula
i = r × (1 + KKDF + BSMV)
A = P × i / (1 − (1 + i)^(−n))
- A: the monthly installment
- P: the loan amount (principal)
- r: the bank’s contractual monthly rate as a decimal (0.03 for 3%)
- KKDF, BSMV: the rates charged on the interest, as decimals (0.15 for 15%)
- i: the monthly rate with taxes
- n: the term in months, that is, the number of installments
If the bank quotes a yearly rate, divide it by 12 first: 36% a year is 3% a month and gives the same installment.
Step-by-step example
A 100,000 TRY personal loan at 3% a month for 12 months, KKDF 15%, BSMV 15%:
- Find the monthly rate with taxes: 3% × (1 + 0.15 + 0.15) = 3.9%.
- Find the installment: 100,000 × 0.039 / (1 − 1.039^(−12)) = 10,593.48 TRY.
- Split the first installment: interest 100,000 × 3% = 3,000 TRY, KKDF 450 TRY, BSMV 450 TRY. The remaining 6,693.48 TRY repays principal, which leaves 93,306.52 TRY.
- Each month, compute the interest on the principal left. The interest part falls and the principal part rises.
- Find the total repayment: 10,593.48 × 11 + 10,593.52 = 127,121.80 TRY. The last installment differs by a few kuruş because of rounding.
The loan costs 20,862.94 TRY in interest, 3,129.43 TRY in KKDF and 3,129.43 TRY in BSMV. The interest rate in the example is an illustration, not a market rate.
How the term changes the installment
A 100,000 TRY loan at 3% a month, KKDF and BSMV 15%:
| Term | Monthly installment | Total repayment | Total interest |
|---|---|---|---|
| 12 months | 10,593.48 TRY | 127,121.80 TRY | 20,862.94 TRY |
| 24 months | 6,491.71 TRY | 155,800.98 TRY | 42,923.78 TRY |
| 36 months | 5,215.68 TRY | 187,765.02 TRY | 67,511.50 TRY |
A longer term lowers the monthly installment. But interest runs for longer, so the total repayment rises.
Common mistakes
- Leaving out the taxes. Without KKDF and BSMV, the same loan gives an installment of 10,046.21 TRY; the bank’s payment plan shows 10,593.48 TRY. KKDF on consumer loans in Türkiye 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).
- Reading a yearly rate as monthly. 36% a year and 36% a month are very different. Divide a yearly rate by 12 before you use the formula.
- Treating a housing loan like a personal loan. BSMV is not charged on the housing loan of a consumer who owns no registered house on the loan date (Law 6802 art. 29/1-y). On housing loans both rates are usually 0; check your bank’s payment plan.
- Looking only at the installment. The installment leaves out file fees and insurance. To compare loans, use the annual cost rate, which includes these costs.
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
Monthly rate with taxes
i = r × (1 + KKDF + BSMV)
i = 3% × (1 + 15% + 15%) = 3.90%
Monthly installment
A = P × i / (1 − (1 + i)^(−n))
A = 100,000 × 3.9% / (1 − (1 + 3.9%)^(−12)) = 10,593.48
Total repayment
total payment = sum of the installments
total payment = 10,593.48 × 11 + 10,593.52 = 127,121.8