Islamic banking and finance (IBF) is based on good faith investment and are guided by Islamic law. You can get sharia-compliant loans or halal loans from the Halal Mortgage around. You do not necessarily have to be a Muslim to get the benefit of a halal loan, as these finance and banking products and services are for everyone.
Halal loans are different from conventional loans in a variety of aspects.
Guided by Islamic Principles
There are four main Islamic finance principles that are taken into consideration when providing loans.
Riba As per the sharia law, usury or interest is strictly prohibited. None of the Islamic loans is replayed with interest; in fact, there is no presence of interest element in Islamic banking and finance.
Musharakah As per Musharakah, you can opt for where is you can make a decision with the bank to own separate shares in the property. You can gradually buy the share owned by the bank by buying more and more shares of the property from the ones that are owned by the bank.
Ijara The word meaning of it is a lease in Arabic. The bank would buy the property that you are want to purchase and lease it to you at a fixed monthly cost. The ownership of the property stays with the back until the loan is paid outright.
Murabaha the back would buy the property that you are looking forward to buying and sell it to you at a higher rate. The higher price is to be paid in fixed monthly installments to the bank.
These financial tools are provided with the aim to provide access to finance for all classes of people, whether muslin or non-muslin. The no-interest policy saves the considerable cost of people. Yes, these are available lower cost than most of the conventional loan options. In fact, these loans are available at competitive rates and have been shown to be saving a considerable amount of money in the long run.
Unlike the process of conventional loans, halal loans are lesser complicated. From the application process to each monthly payment, these loans are easy to understand for each person with no foreknowledge. Further, the banking sites make it simpler by using the latest technology and the internet by providing the convenience to complete the processes online. This is the best alternative if a person is looking for a loan option with lesser complexities.
Increased Halal Loan Providers
Back when there were a few Islamic banks, they could not cope with the demand that surged as many Muslims and non-Muslims wanted to benefit from Islamic banking and financial products. Today, it is not the case as the number of Islamic banks has increased, and so is the reachability.
Further, the product and services are optimised guided by Islamic principles to provide added benefit without breaching the sharia law.
If you have been keeping off from getting the halal loans thinking that it is for Muslims only, then you are shutting yourself from many benefits.