Default interest

Under Turkish law, default interest is the interest a debtor must pay for the period of delay after failing to pay a monetary debt on time. The creditor does not need to prove any actual loss; the delay itself is sufficient to trigger the claim.

Interest runs from the date the debtor falls into default until payment. The parties may agree on the rate in their contract; absent such agreement, the statutory rate applies. In commercial transactions a higher statutory rate can be claimed than in ordinary civil matters.

Statutes place certain ceilings on contractual default interest, and excessive rates may be struck down, particularly in consumer transactions. Charging interest on accrued interest (compound interest) is, as a rule, prohibited.