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MUSLIMCREED These days, getting student loans can be very tough if you have less than stellar credit or if you’re starting a business instead of just going to college or trade school. However, there are plenty of options out there for students looking to get an Islamic loan and start building good credit from the beginning rather than trying to repair bad credit later on. Here are the top five Islamic loan applications that students should use first when looking to take out an Islamic loan.
Istisna’a
Istisnaa is a type of contract that has been developed in order to help Muslims who want to invest in real estate. It also provides the investor with a loan from the bank, and this loan can be paid back on an agreed-upon schedule. Istisnaa is different from other types of Islamic contracts because it can last anywhere between five years and ten years, which makes it a great option for students who are looking to buy their first home. As long as they have enough money saved up and are making regular payments, there will not be any interest charged on the loan. There is one big difference though – if the person defaults on the loan, then they will have to give up some of their property as repayment.
Murabahah
Some of the most popular forms of Islamic financing are Murabaha and Ijara. Murabaha is a profit-sharing contract where the bank buys a commodity from the customer with a fixed markup, which can be up to 100%. The customer will then have to make monthly payments until their loan has been fully paid off. Ijara loans are when banks or other lenders rent out property to customers for an agreed term. A typical example would be someone renting a car for 3 years. When it comes time to return the car, the bank sells it at market value and gives you any leftover money in addition to what you’ve already paid them over those three years in rental fees.
Read Also : Get out of student loan debt with an Islamic student loan
Salam
Everyone’s dream is to go to university and earn their degree. The process can be overwhelming though, with all the different loan applications and paperwork that you need to fill out.
We’ve compiled a list of the most useful Islamic loan applications for students, so you can see which ones will work best for your situation. Here are our top five picks
– UIB Bank: A subsidiary of United Arab Bank based in Dubai. They provide educational loans up to 200 000 AED over a period of 8 years
– Qatar National Bank (QNB): An international bank headquartered in Doha, Qatar. Loans start at 100 000 Qatari Rials
– Al Rajhi Banking & Investment Corporation: One of Saudi Arabia’s largest banks.
Ijarah
It’s always tricky to figure out how to pay for college, but there are some great applications out there that make it much easier.
That being said, there are a few important things to keep in mind when looking into these loans.
– Ijarah is a loan of money with the ownership of the asset as collateral. This means you’re borrowing money from someone and using your education as collateral so they’ll get their money back and then some if you can’t pay them back.
Musharaka
A musharaka financing agreement is a cooperative venture between two or more parties. One party invests money, while the other provides expertise and/or labor. The profit generated by the project is then shared among the investors in proportion to their investment, but there’s no guarantee that one party will be repaid first.
