Why are minimum payments dangerous?

Most of the minimum payment goes toward interest and taxes, leaving very little for the principal. This causes the debt to decrease very slowly, and the total amount paid can reach multiples of the original debt.

How is the minimum payment rate determined?

Banks set the minimum payment rate according to BRSA regulations. This rate is typically between 20-40% of the total balance. The lower the rate, the longer it takes to pay off the debt.

How much should I pay instead of the minimum?

Ideally, pay your full balance. If that is not possible, try to pay at least 2-3 times the minimum. Every extra payment significantly shortens your payoff timeline.

Minimum Payment Calculator

This calculator is for informational purposes only. Results are estimates and may differ from actual values.

What Is the Minimum Payment Trap?

The minimum payment is the lowest amount set by your bank to keep your account in good standing. However, making only minimum payments dramatically extends your payoff timeline.

Example: With 10,000 TL debt making only minimum payments, the total amount paid can reach 2-3 times the original debt and payoff can take years.

What Should You Do?

Pay the highest amount possible — do not limit yourself to minimum payments.
Try to pay at least some principal above the interest amount.
Set aside a fixed extra payment amount from your budget each month.
If you have multiple cards, prioritize the highest interest rate card (Avalanche method).

Info

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