Islamic property financing, also known as Shariah-compliant property financing, is a form of financing that adheres to the principles of Islamic law (Shariah). Islamic property financing operates on the basis of shared risk and reward, and prohibits the payment or receipt of interest (riba).
- Ownership: In Islamic property financing the bank and the borrower both own the property jointly. The borrower is entitled to use the property for a specified period of time, while the bank owns the remaining portion of the property.
- Profit and Loss Sharing: Instead of charging interest on the loan, the bank and the borrower share in the profit and loss associated with the property. For example, if the borrower rents out the property, the bank and the borrower would share in the rental income based on their ownership stake in the property.
- Payment: The borrower makes periodic payments to the bank, which represent a portion of the rent or revenue generated by the property. These payments are structured so that the bank receives a return on its investment, but does not charge interest.
- Repayment: At the end of the financing period, the bank transfers its share of ownership in the property to the borrower. This transfer is usually done through a gradual process, with the borrower gradually purchasing the bank’s share over time.
Islamic property financing can be a complex process and requires both the bank and the borrower to adhere to strict guidelines and principles.
However, for those who are interested in Shariah-compliant financing, Islamic property financing can provide an alternative to traditional forms of financing that may not align with their beliefs or values.
About Limra Assets
Limra Assets is a Shariah-compliant financing solutions financier that provides loans for property financing, SME businesses loans and gold investment. We offer a range of financing options to help individuals and businesses, including alternative financing for businesses that are unable to obtain funds. Our goal is to provide access to funds for investments in a Shariah-compliant manner that focuses on transparency, customer service, and competitive rates, Limra Assets can be a valuable partner in your gold investment journey.
If you’re interested in learning more about Limra Assets and our Shariah-compliant financing solutions for property purchases, gold purchases or business loans, please contact us for more information.
Disclaimer:
It is important to note that taking out a loans for any purchases and gold investment, whether through Limra Assets or any other lender, carries risks and should be approached with caution. It is important to carefully consider your financial situation and investment goals before taking out a loans, and to ensure that you fully understand the terms and conditions. Additionally, investing in gold carries its own risks and should be done with the guidance of a financial professional. This information and all external links are provided for educational purposes only and should not be considered financial advice.