The annual cost rate (YMO in Turkey) sums up in a single percentage what a loan actually costs you. A nominal monthly rate describes interest alone; the annual cost rate also carries the BSMV and KKDF levied on that interest, the fees deducted up front, and the time value of money. This tool works in both directions: given an offer, it builds the installment and schedule from amount, rate and term; given an installment you already pay, it solves the effective monthly and annual cost from that cash flow.
What this calculator works out
The tool treats a loan as a sequence of cash flows: the net amount that reaches you at the start is an inflow, and every installment you pay is an outflow. It finds the monthly rate that makes those two sides equal in present value, then annualises it. The percentage you see means "the effective yearly price of carrying this loan".
- Gives the approximate effective annual cost rate and the monthly cost rate.
- In offer mode, derives the fixed installment and prints a month-by-month schedule.
- Separates total payments and fees from the part that exceeds the principal.
- Applies the BSMV/KKDF profile matching the loan type you select.
- Treats upfront fees as a reduction in the net proceeds you actually receive.
Why the nominal monthly rate is not enough
A nominal monthly rate is the rate applied to principal alone. Three things that make a loan more expensive sit outside it: the BSMV and KKDF charged on the interest, the file and allocation fees deducted at drawdown, and compounding — the fact that whatever you do not repay this month is carried into the next. Multiplying a monthly rate by twelve looks like an annual cost but consistently understates the real one.
Comparing installments is misleading too. The same installment can correspond to very different total costs once term and fee structure differ. Stretching the term lowers the installment while raising the total interest paid. The annual cost rate is the right basis for comparison precisely because it folds both effects into one measure.
Consider two offers of 100,000 TL over 24 months at a nominal 3% per month. The first carries no fee; the second deducts 5,000 TL at drawdown. In the second, only 95,000 TL reaches you, yet your installments are still computed on 100,000 TL. The nominal rate is identical in both, but the second has a markedly higher effective annual cost. Enter both offers here to see how large the gap actually is.
The two working modes
The input-method field offers two routes depending on what you already know. Both use the same present-value logic; what differs is where the installment comes from.
- Offer mode ("From amount, rate and term"): you enter the loan amount, monthly rate and term. The tool builds the fixed installment using the tax profile of the loan type you chose, shows the monthly split into principal, interest, BSMV and KKDF, and solves the annual cost from that payment stream. Use it when you have not drawn the loan yet and are holding a quoted rate.
- Cash-flow mode ("From actual cash flows"): you enter the loan amount, the installment you genuinely pay and the term; no interest rate is asked. The tool works backwards to the effective rate implied by those real payments. Because it rests on money actually paid rather than on a quoted figure, it is the more honest measure once you hold a signed payment plan.
The total upfront fees field is active in both modes, and a fee raises the cost rate by lowering the net amount you receive. A fee equal to or larger than the loan itself is not meaningful, and the calculation is refused in that case.
How the loan type changes the result
In Turkey the taxes and funds levied on loan interest depend on the type of loan, and they land inside the installment. The tool applies the BSMV/KKDF profile for the type you select: personal, commercial need, housing, personal vehicle, commercial vehicle and other. Commercial need and commercial vehicle are handled under the same commercial tax profile.
Housing loans add a "the borrower has a registered home" switch. That status leads to different BSMV treatment, so it moves the installment and therefore the cost rate. Choosing a type that does not match your situation biases the result in one direction rather than merely blurring it.
In cash-flow mode you supply the installment yourself, so the tax is already inside it and the tool adds nothing further. In offer mode the tool builds the installment, and the schedule rows let you read the principal, interest, BSMV and KKDF shares separately.
Reading the result
- Approximate effective annual cost rate: the single number to compare offers on. At the same amount and term, lower is cheaper.
- Approximate monthly cost rate: the same measure per month. It sitting above your nominal monthly rate is expected, because it contains tax and fees.
- Calculated installment (offer mode only): the fixed payment derived from the rate and term you entered.
- Total payments and fees: everything that will leave your pocket over the term.
- Interest, tax and fee cost: the part of that total above the principal — the net price of borrowing.
- Amortization schedule (offer mode only): principal, interest, BSMV, KKDF and remaining balance for each month.
When comparing two offers, hold the amount and term fixed. If the terms differ the annual cost rate is still comparable, but the total-cost figures are not directly so: a longer loan almost always pays more in total.
Limits and cautions
The calculation equates monthly cash flows in present value on a twelve-equal-month year. The official annual cost rate in a bank’s pre-contract information form can differ because of day-count conventions, payment dates falling on weekends, insurance premiums, compulsory life or property cover, account maintenance charges and bank-specific cash flows. The bank’s own disclosure is the binding figure.
- Insurance and commissions you do not enter are not reflected; if two offers differ in compulsory insurance, the comparison is incomplete.
- Early closure, lump-sum overpayment and payment-holiday scenarios are not modelled; the schedule is assumed to run regularly from start to finish.
- Variable-rate loans, or loans repriced mid-term, are treated as if the rate were fixed.
- The term cannot exceed 600 months, and fees cannot equal or exceed the loan amount.
Frequently Asked Questions
How does the annual cost rate differ from the nominal rate?
The nominal rate is interest on principal only. Monthly nominal × 12 is a simple annualized nominal rate; the compounded annual effective rate is (1 + monthly rate)^12 - 1. Even with no fees or taxes, those two rates do not coincide when the monthly rate is positive. This calculator derives its annual-cost result from the monthly rate that equates the present value of the modeled cash flows.
Which mode should I use?
If you have not drawn the loan and are holding a quoted rate, use offer mode. If you are already repaying and know the real installment on your payment plan, cash-flow mode is more accurate, because it rests on what you actually pay rather than on the rate the bank quoted.
How should I enter the fees?
Enter the total amount deducted from you or charged to you at drawdown: file fees, allocation fees, appraisal and similar. Because it reduces the cash that reaches you, it raises the cost rate. Recurring monthly charges such as a monthly insurance premium do not belong in the upfront fees field.
Why does the result not match the rate my bank quotes?
Banks compute their official rate on a day-count basis, with their own fee items and compulsory insurance, and payment dates are not necessarily evenly spaced on the calendar. This tool assumes a twelve-equal-month year and knows only the items you entered. Even with every item entered a small gap can remain; the pre-contract information form governs.
Why can two loans at the same nominal rate cost different amounts?
Because cost is not interest alone. Upfront fees, the tax profile tied to the loan type and a difference in term all produce a different effective cost at an identical nominal rate. A fee deduction lowers what reaches you while your installment is still computed on the full principal.
Does a longer term make the loan cheaper?
Your monthly installment falls, but the total interest and tax you pay generally rises. Because the annual cost rate is a yearly measure, it does not drop dramatically when you extend; what really changes is how many years that rate keeps running. Read both the annual cost rate and the total-cost row before deciding.