Islamic Banking & Loans

pat_sexy

Does anyone know much about obtaining loans under Sharia law.

The Islamic Bank of Britain claims to provide loans without interest.

Is this a way to obtain a cost-free loan?

Or what are the hidden charges?

For example, if I were to get a loan for £1,000 over 12 months how much would I actually be paying each month to repay this?

Thanks a Million?

Pat

deemy2004

I bank would not last long with cost free loans

They way I see it working would be that the bank would charge a FEE which would be equal to the interest and thus it would be inline with muslim law.

I..e 10% of £1000 = £100 - Hence fee charged to arrange the loan is £100.

justpaper

i believe its something like deemy said they just dont call it interest but its a Fee,. i guess u should give them a call to clear it out

isasmurf

The bank purchases the product you want to buy with the loan and then leases it to you until the loan is paid off.

Islamic mortgages work in this way, where the house is registered in the Banks name for the term of the mortgage and you pay rent to the bank. At the end of the mortgage term the house is transferred into your name.

lipidicman

isasmurf wrote:

The bank purchases the product you want to buy with the loan and then leases it to you until the loan is paid off.

Islamic mortgages work in this way, where the house is registered in the Banks name for the term of the mortgage and you pay rent to the bank. At the end of the mortgage term the house is transferred into your name.

What happens if the bank gets into trouble?