Simple and Compound Interest: Loan–Deposit Comparison
When you take a loan, the total amount you will pay is calculated. Then, the break-even deposit interest rate needed to cover that amount is found automatically. For example, if you can find a loan at 2.3% monthly and banks offer a deposit rate above the calculated break-even rate (say 42% annually), at maturity the deposit both repays your loan and leaves money in your pocket.
Loan Compound Interest Calculation
Equal monthly instalments (annuity)
Upfront charges such as arrangement fees and insurance, deducted at disbursement
Bank Time Deposit Return
Same term as the loan, rolled over monthly
Enter the current gross rate from your own bank; this field does not update automatically.
Same as loan term
Taken from the loan amount automatically, less upfront charges.
Auto-set by term: 17.5% up to 6 months — 15% up to 1 year — 10% over 1 year. You can change it.
Enter the annual deposit rate your bank offers to see the results.
Real Scenario: What If You Put the Loan Into a Deposit?
Compares an instalment loan with the deposit rate your bank offers
Enter a valid loan amount, a term of at least 1 month and a deposit rate.
The loan is assumed to be an equal-instalment (annuity) loan. Upfront charges are deducted at disbursement, so the deposit receives the principal less those charges. The deposit is rolled over monthly, instalments are paid from it and the remaining balance keeps earning interest. Interest lost when a time deposit is broken early is not taken into account.
This is not investment advice. Your loan agreement may restrict how the loan is used, and the BSMV rate on commercial loans can vary with exemptions.
💡 How Does This Calculator Work?
Basic Logic: When you take a loan, the total amount you will pay is calculated. Then, the break-even deposit interest rate needed to cover that amount is found automatically. For example, if you can find a loan at 2.3% monthly and banks offer a deposit rate above the calculated break-even rate (say 42% annually), at maturity the deposit both repays your loan and leaves money in your pocket.
📉 In Loans:
- • Compound interest is used (monthly)
- • Unpaid interest is added to principal
- • Interest on interest is calculated
- • Actual cost is higher than the annual rate
📈 In Deposits:
- • Simple interest is used (annual)
- • Paid in a single payment at maturity
- • Within a single term there is no interest on interest; if the deposit is rolled over monthly, interest compounds
- • 15% withholding deduction is applied
⚠️ Example: If you take a 100,000.00 TRY loan for 8 months, you repay 113,917.04 TRY in total. If you put the same money in a time deposit and pay the instalments from it, the gross annual deposit rate must be at least 42.21% for the scenario to break even.