Early Payment Refund for Consumer Loans (TKHK Article 27)

Law on Consumer Protection No. 6502 (TKHK) Article 27 grants the consumer the right to deduct interest for the remaining maturities if he closes his loan early.

Legal Basis: TKHK article 27

"The consumer may pay one or more installments that are not due, or may pay the entire consumer loan debt before the due date. In these cases, the lender is obliged to make all necessary interest deductions and fee reductions for the installments paid before the due date."

Which Credits Are Covered?

• Needs loan
• Vehicle loan
• Housing finance (TKHK article 37 - special regulation on housing loans)
• Overdraft account
• Credit card debt (limited)

Discount Calculation

The bank calculates the new principal debt by subtracting the interest amounts in the remaining maturities according to the decreasing balance method. The amount paid early is offset against the remaining principal; Interest discount is applied automatically.

Early Payment Penalty for Housing Loans (TKHK Article 37)

In housing financing, if the interest rate is fixed, as of the early payment date:

• If the remaining maturity is 36 months: 1%
on the principal
• If the remaining maturity is more than 36 months: 2%
on the principal

can be received. Compensation cannot be received for variable interest housing loans.

Consumer Arbitration Panel Application

If the bank does not make a discount or calculates it incorrectly, an application can be made to the Consumer Arbitration Committee.

• Provincial Consumer Arbitration Committee:Disputes over a certain amount (updated every year)
• District Consumer Arbitration Committee:Lower amounts
• Consumer Court: Disputes exceeding the decision limit of the arbitral tribunal

Approach of the 13th and 19th Civil Chambers of the Supreme Court

The 13th Civil Chamber of the Supreme Court of Appeals condemns banks to refund these amounts if they do not apply the "decreasing balance method" when giving early payment discounts and collect additional fees not foreseen in the law.

The 19th HD of the Supreme Court of Appeals consistently states that unfair conditions such as "file fee", "intelligence fee", "usage fee" are invalid within the scope of TKHK Article 5 and TBK Articles 20-25, and that the consumer can request a refund of the amount paid.

Process