The Sharia is the governing law which is also called Islamic Law and has some guidelines when it comes to dealing with finances. Since the law prohibits the collection of any type of interest or “riba” from the loan bearer, it is mostly focused on the concept of shared benefits, which helps both the lender and the borrower. This is quite a great thing for those living in UAE as they can choose to borrow Islamic Finance Loans from leading banks. Continue reading this blog to know more.
For What Purposes an Islamic Finance Loans Can Be Availed?
The Islamic Finance Loans UAE are available from leading banks and can be availed for various purposes like Buying a new property, setting up a business, education, personal loan, etc. Islamic Loans Dubai can be borrowed in an ethical manner on the basis of trust and fair dealing.
What are Different Types of Islamic Finance Loans UAE?
The Islamic Laws foster the concept of gaining profits from assets and investments but not from offering money for lending as this concept is strictly prohibit. Here are the different types of Islamic Finance Loans available:
- Musharakah (Partnership): It is a type of joint venture where all parties contribute funds and share its profits and losses. It’s essentially an investment partnership, providing capital to a business, and profits are shared as per the ratio shared upon the terms.
- Mudarabah (Profit Sharing): In this type of dealing, one party provides the capital and the other the expertise. The profits are shared as per the terms, but the loss is borne only by the provider of the capital.
- Murabaha (Cost Plus Financing): It is a common form of Islamic loan used for purchasing various assets like a home or car. The bank buys the asset and then sells it to the customer at a marked-up price, which is paid in installments. The profit margin and payment schedule are agreed upon in advance.
- Jarah (Leasing): It is similar to a lease-to-own agreement. The bank buys the asset and leases it to the customer for a fixed period. At the end of the term, the customer has the option to buy the asset at an agreed-upon price.
- Salam and Istisna (Forward Sales): These are used for financing the production of goods. In Salam, the payment is made in advance by the bank, and the goods are delivered in the future. Istisna is similar but used for creating an asset, like a building.
The Islamic Loans Dubai offers lucrative advantages to borrowers as these types of loans are interest-free, ethical, transparent, and based on the model of profit-sharing arrangement. This gives the borrower peace of mind to borrow loans for any of the purposes to meet finance needs without any false claims or commitments by banks or lenders. If you are also looking to avail Islamic Finance Loans then you can contact ADCB, which is one of the leading banks in UAE.