Karnal wrote on Jan 11
th, 2013 at 3:35pm:
Baronvonrort wrote on Jan 11
th, 2013 at 3:29pm:
freediver wrote on Jan 11
th, 2013 at 1:32pm:
I'm interested to know how these loans work too. As far as I can tell it is a rent to buy type situation, and they just add the interest onto the price and other charges. I don't think the Islamic rule is against profiting from the situation, just interest.
They add the interest into the purchase price then claim they are not paying interest.
Cunning, no?
No wonder the Western banks like Macquarie are getting in on the act. Anyone interested in converting to Islam yet?
So how does it work in a proper Islamic context? Are they supposed to discriminate then?
Quote:For example you could simply apply a fee for lending. Lending is a service, so its fair enough you can charge for that service (over and above the actual repayments).
Could you make the fee proportional to the remaining loan amount? Or re-issue the loan on a regular basis on this principle?
Quote:since until the loan is paid off, the bank owns the house
If they want out of the deal before they have paid it off, do they end up with nothing?
Quote:In all cases, the bank profits through investing into something tangible - rather than simply charging money on money.
How is that any different from a mortgage? You won't find many banks willing to lend that much without a tangible asset attached to the deal.