Muslimcreed – It’s no secret that college can be an expensive endeavor, costing you tens of thousands of dollars over the course of your higher education career. If you don’t have tens of thousands of dollars sitting in your savings account, the prospect of paying for school can seem daunting. It doesn’t have to be; Islamic student loans are one way to help you get through school without getting buried in debt or feeling like you have to forego your dream career path because you couldn’t afford to go to college in the first place.
As an international student, financing your education can be a daunting task. One of the best ways to finance your education is with an Islamic loan. In this blog post, I will break down what it’s like to have an Islamic loan and how it can help you finance your education.
My name is Rizwan and I am a student at the University of Massachusetts-Amherst in Amherst, MA. I’m originally from Pakistan and currently a sophomore studying biomedical engineering. As a Muslim American, one of my passions is providing financial aid for other Muslim students who are also pursuing higher education.
In accordance with Islamic law, an interest-free loan is one of the best ways for Muslim students to finance their higher education. I am proud to have been given a scholarship from Dar Al-Maal Al-Islami Trust to help me finance my higher education. In exchange for my financial assistance, I will be working at DMI for three years after graduation.
How do Islamic student loans work?
An Islamic student loan is a type of financing that is based on your izzah – your creditworthiness. Unlike other types of loans, you do not have to pay interest or make monthly payments. You repay the loan when you have the ability and means to do so. The ease and affordability of an Islamic student loan makes it perfect for students who are just starting out in life and trying to build a career while still in school. Even if you don’t qualify for other types of loans, you may be able to get an Islamic student loan with help from a sharia-compliant lender like Amanah Wealth Management.
Unlike traditional student loans, where you pay interest in exchange for access to funds, an Islamic student loan is a contract between you and a lender. You agree that as long as you have a stable income, once your education is complete and you’ve paid off your other debts, such as car payments or credit cards, you will repay your Islamic student loan in cash.
What are the benefits of Islamic student loans?
Student loans are not a new concept. They have been around since the 1950s and they have always been a reliable way for students and graduates to finance their education. But what if you want a more sustainable and ethical way of financing your education? Enter Islamic student loans. There are two types of Islamic student loans available, each with its own benefits.
1) Murabaha Loan – this is the most popular type of loan because it is set up like any other loan with a fixed rate of return that is determined at the time the loan is taken out.
2) Ijarah Loan – For those of you who aren’t sure about committing yourself to a particular career path, an ijarah loan is for you. This type of loan is also interest free, but it means that you are effectively leasing your chosen university or training facility and making money off them in return for free tuition. An ijarah loan can be structured in many different ways so you can tailor it to your own personal situation and circumstances. You can lease your chosen school, college or training facility on either a temporary or permanent basis depending on how long you think it will take before you start earning enough money to finance further education without taking out a student loan.
Are there any disadvantages of Islamic student loans?
It is important for students to understand Islamic student loans in order to make an educated decision about what type of financing they want. Islamic student loans are a great option because it is a win-win situation. You get the money you need for school and you don’t have to worry about interest rates, monthly payments, or high APR’s. However, with any loan there are disadvantages that come with it. For example, if you do not finish your degree within the specified time frame then the lender may require immediate repayment of the loan. Another disadvantage is that these types of loans only come from Muslim banks so if this is not your faith then this may not be an option for you.
The Islamic student loans are the perfect way for you to finance your education, as they are flexible, convenient and affordable. Unlike traditional student loans that come with high interest rates and strict repayment schedules, there is no interest charged on an Islamic student loan. This means that you will be able to pay back your debt more easily, without having any worries about the extra costs of paying back your loan. It is important for students who wish to pursue higher education but do not have the funds available for it, or want better terms than what a traditional loan can offer them, take advantage of an Islamic student loan today!