Soaring Inflation Drives Turkish Households into Record Debt: Personal Loans Surge by 46%

Amid skyrocketing inflation and mounting living costs, Turkish households are increasingly relying on debt to cover even their most basic expenses. According to new data from the Banking Regulation and Supervision Agency (BDDK), total individual loan and credit card debt in Türkiye surged by 43% over the past year, reaching ₺4.493 trillion as of May 2025.

The steepest rise was seen in consumer loans, also known as personal loans, which are often used for daily expenses. Credit card debt also climbed to record highs, signaling growing distress in the Turkish economy.

Consumer Loans Up 46% in a Year

Data shows that personal loan volume rose from ₺1.147 trillion in May 2024 to ₺1.675 trillion in May 2025—an astonishing 46% increase in just 12 months.

This dramatic surge underscores how many Turkish citizens are increasingly turning to short-term borrowing to cope with routine living expenses such as groceries, utility bills, and healthcare.

Credit Card Balances Reach Alarming Levels

Credit card debt, long a barometer of household financial strain, also ballooned sharply, reflecting the growing reliance on plastic to bridge the gap between income and expenses. Experts warn that without real wage growth, this trend may lead to a household debt crisis.

Housing and Auto Loans Also Climb, But Caution Emerges

• Mortgage lending rose by 28% in one year, from ₺446.9 billion to ₺575.6 billion, indicating continued demand for housing despite rising interest rates.

• Auto loans, however, saw a mixed picture. Although they increased by 33% compared to earlier lows, balances declined from ₺92 billion to ₺61.5 billion, suggesting that high vehicle prices and interest rates are discouraging new car purchases.

Economists Warn of Structural Risk

Economists argue that this sharp rise in household debt reflects deeper structural weaknesses in the Turkish economy, particularly persistent inflation and stagnant real incomes. As more citizens turn to borrowing to maintain basic living standards, long-term financial stability risks grow.