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Although the loan terms and minimum payment amounts regulated by the Banking Regulation and Supervision Agency on June 9, eased loan demands for a week, consumer loan growth has continued since the beginning of summer. According to the latest data of the Agency, 552.2 billion consumer loans have been used since the beginning of the year.

*** This release is originally published in Turkish.

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ISTANBUL (TR) - The Banking Regulation and Supervision Agency of Turkey changed the general maturity limits for consumer loans with its press announcement on June 9. In addition to the maturities determined as 24 months for loans between 50 - 100 thousand TL and 12 months for loans of 100 thousand TL and above, the minimum payment amounts have also changed. After this move of the Agency, consumer loans broke new ground 4 months later and showed signs of slowing down in the week of July 8, although the data for the first half of 2022 showed that consumer loans continued to grow. Accordingly, consumer loans, whose total amount increased to 929.7 billion TL as of August 5, consisted of consumer loans with a value of 552.2 billion TL.

Commenting on the data, Hesapkurdu.com Banking and Business Development Manager Orhun Çağlar Atilla said, “According to the data of Banking Regulation and Supervision Agency, despite the changes in the maturity and minimum payment amounts and the rising interest rates, 5.39 billion TL consumer loans have been used since the beginning of summer. In the same period, the weekly increase in non-performing consumer loans is also striking. At this point, it is important for consumers who are considering borrowing to banks to know the differences and advantages of consumer loans and cash advances, and to choose the solution that best suits their needs.”

Cash advance is recommended for short term and low amount needs

Increasing interest rates on consumer loans also led users to different options. Orhun Çağlar Atilla pointed out that cash advance, which can be defined as cash withdrawal in installments over a credit card, is one of these options and can be used with a maturity of 12 months. According to the monthly cash advance interest rates announced by the Central Bank of Turkey, the interest rate determined for August 2022 was 1.80%. In consumer loans, this rate starts from 1.95%, although it varies from bank to bank and the consumer's credit rating. At this point, a consumer who chooses a cash advance for a cash need of 10 thousand TL pays a total of 11,460 TL at the end of 12 months, with a monthly installment of 955 TL. In the case of using consumer loans with the same amount and maturity, the monthly installment amount will be 965 TL with the lowest interest rate, while the total repayment can be estimated to be 11,635 TL. This amount does not include the life insurance cost required for consumer loans. In this respect, cash advances seem more advantageous for short-term and low-amount needs.”

“For larger amounts, consumer loans may be preferred”

Orhun Çağlar Atilla, Banking and Business Development Manager of Hesapkurdu.com, stated that it would be more attractive to use cash advances only through ATMs, without going through a loan process, without visiting the bank, for amounts that can be paid in shorter installments, such as TL 10 thousand. He commented: "Consumer loans can be preferred in cases where credit card and cash advance limits are not sufficient. Consumers, who can benefit from different types of consumer loans from different banks according to the area to be used, can calculate the average installment amounts with current interest rates through the tool on Hesapkurdu.com. The same is true for cash advances. On the other hand, consumers who register on Hesapkurdu.com can benefit from the advantageous interest rates and maturity options offered by banks for our platform.”