How to Calculate Early Loan Repayment in Türkiye

Formula

remaining principal = loan amount − principal repaid in the installments paid

early repayment fee = min(remaining principal × fee rate; interest discount)

payoff amount = remaining principal + early repayment fee

saving = sum of the remaining installments − payoff amount

• principal repaid: the principal part of each installment in the payment plan, including the one paid on the payoff day
• fee rate: 0 on consumer loans and variable-rate housing loans; on fixed-rate housing loans at most 1% when 36 months or less remain, at most 2% when more remain
• interest discount: the interest, KKDF and BSMV in the remaining installments; the fee cannot exceed it
• sum of the remaining installments: what you would pay if you kept the loan

Step-by-step example

A 100,000 TRY personal loan at 3% a month for 24 months, KKDF and BSMV 15%, after 12 installments:

1. Find the installment: the monthly rate with taxes is 3.9%, the installment 6,491.71 TRY.
2. Find the remaining principal: the first 12 installments repaid 38,719.86 TRY of principal; 100,000 − 38,719.86 = 61,280.14 TRY.
3. Set the fee: a personal loan is a consumer loan, so the fee is 0 TRY (Law 6502 art. 27).
4. Find the payoff amount: 61,280.14 + 0 = 61,280.14 TRY.
5. Add up the remaining installments: 6,491.71 × 11 + 6,491.65 = 77,900.46 TRY.
6. Find the saving: 77,900.46 − 61,280.14 = 16,620.32 TRY.

The interest rate in the example is an illustration, not a market rate.

The early repayment fee on housing loans

On a fixed-rate housing loan in Türkiye, the bank may charge at most 1% of the prepaid principal when 36 months or less remain, or 2% when more remain. The fee cannot exceed the interest discount (Law 6502 art. 37/2; Housing Finance Contracts Regulation art. 11/4). Variable-rate housing loans carry no fee.

A fixed-rate housing loan of 2,000,000 TRY at 2.5% a month for 120 months (KKDF and BSMV 0, installment 52,723.59 TRY), with the legal maximum fee:

A bank may set a fee below the legal maximum in the contract.

Common mistakes

• Taking the sum of the remaining installments as the payoff. You pay the remaining principal and any fee. In the first example the gap is 16,620.32 TRY.
• Forgetting the days between installments. If you close between two installment days, interest for the days since the last installment, and the taxes on it, are added to the payoff.
• Expecting a fee on a personal loan. The law provides no early repayment fee on consumer loans; the bank must deduct the interest and costs of the remaining term (Law 6502 art. 27).
• Treating a partial payment like a payoff. This calculation is for closing the whole loan; a partial prepayment does not follow this formula.