The accurate differentiation of inrush currents and inter-turn faults in power transformers is critical for ensuring the reliability and safety of electrical power systems. Traditional methods often face challenges in distinguishing between these conditions due to their overlapping characteristics, leading to potential misoperations and system instability. This paper presents a novel solution through the introduction of the time-current loci (TIL) method, which effectively addresses this critical issue by providing a robust mechanism for classifying normal operating conditions, inrush currents, and inter-turn faults. The TIL method involves plotting time against current over a single cycle, generating distinct loci patterns that serve as a visual and analytical foundation for classification. By extracting and analyzing key statistical features from these loci, the method enhances the accuracy of fault detection. Specifically, the rate of change in time and current is used to determine the orientation of the TIL curve, with additional features such as the mean orientation and skewness being computed to capture the unique geometric properties associated with each operating condition. This approach simplifies the analysis process, eliminating the need for complex machine learning algorithms and reducing computational demands, making it highly suitable for real-time implementation. Experimental validation was carried out using a 1 kVA, 230 V/230 V transformer under various operating conditions, and the results demonstrated the effectiveness of the TIL method in reliably distinguishing between normal conditions, inrush currents, and inter-turn faults. The visual nature of the loci plots not only aids in accurate classification but also provides an intuitive understanding of transformer behavior, facilitating quick and informed decision-making by operators. This advancement addresses a critical challenge in transformer protection, offering a more reliable and efficient solution compared to traditional techniques.