Advance Interest Rate

The advance interest rate is the rate the Central Bank of the Republic of Turkey (CBRT) applies to short-term advances. Law No. 3095 on Statutory Interest and Default Interest provides for default interest in commercial matters to be determined by reference to this rate, so in practice it is synonymous with “commercial default interest”.

Difference from Statutory Interest

• Statutory interest: The general rate applied where no rate has been agreed. Article 1 of Law No. 3095 was amended by Law No. 7589 of 16 July 2026; statutory interest is now calculated at eighty percent of the rediscount rate applied by the CBRT to short-term credit transactions on 31 December of the previous year. Default interest in ordinary matters is also claimed at this rate (Article 2(1)).
• Advance interest: If the CBRT’s short-term advance rate on 31 December of the previous year is higher than statutory interest, default interest in commercial matters may be claimed at that rate even without agreement (Law No. 3095 Article 2(2)). It is updated for the second half of the year if the rate on 30 June has changed by five points or more.
• If default interest is not agreed but the contractual interest rate exceeds these rates, default interest may not be lower than the contractual rate (Article 2(3)).

Contractual Interest

In commercial matters interest rates may be freely agreed (TCC Article 8(1)). If the contractual default rate is higher than the advance rate, the contractual rate applies. Compound interest may be agreed only in current accounts and loans that are commercial for both parties, at intervals of no less than three months (TCC Article 8(2)).

Relationship with Late Payment Interest

In the supply of goods and services between businesses, if no interest is agreed, the rate announced by the CBRT each January, which is at least eight points above commercial default interest, applies; see Late Payment in Commercial Transactions.

In Practice

In enforcement proceedings and lawsuits, the type of interest and its start date should be stated clearly. Claiming “statutory interest” on a commercial debt may mean accepting a lower rate. For the start of default see Default. For enforcement based on negotiable instruments see Bills of Exchange Enforcement.