Loan interest rates in Turkey go up to 60 percent

The CBRT (Central Bank of Turkey) has reduced the interest rate to 12 percent, but it is becoming difficult for companies and individuals to access credit with interest rates up to 49 percent on housing loans reaching 60 percent on consumer loans.

The Central Bank (CBRT) has revised the policy interest rate to 12 percent, but the gap between it and loan interest rates, is not closing. The arrangement made by the Central Bank with mandatory reserves last month led to a decrease in commercial loan interest rates. But the same situation was not reflected in consumer loans.

BANKS ACT RELUCTANTLY

Consumer loan interest rates in banks have increased up to the 60 percent band. Citizens face annual costs of up to 27 percent to 60 percent in consumer loans, while housing loans start from 15 percent and go up to 49 percent. Loans with 1.20 percent for housing in public banks and 1.29 percent for second-hand housing are difficult to approve.

BLOCKING DEPOSITS

Moreover, most state-owned banks do not provide housing loans over 200 thousand TL. In this case, the low interest applied in public banks is not reflected to the same extent in the loan disbursement volume. SMEs on the other hand, can find loans with annual costs of up to 50 percent. Moreover, banks are also very reluctant to issue loans.

When the CBRT made it almost impossible for commercial loan interest rates to exceed 30 percent, banks began to apply loan allocation fees and high commissions this time. With this application, rotary loans decreased to 18.50-19 levels in the public sector and to 20-21 percent in private banks. Recently, it is stated that banks also demand blocked deposit guarantees from their customers for commercial loans.

SOURCE: sozcu.com.tr/2022/ekonomi/kredi-faizleri-yuzde-60a-kadar-cikiyor-7380934/