Islamic Personal Financing Options and Features

Islamic personal financing offers a range of options that cater to different needs and preferences.

One notable feature is the absence of interest, which is replaced by profit-sharing models such as Mudarabah and Musyarakah. These models allow financiers to share profits with borrowers, creating a mutually beneficial arrangement.

Borrowers can also opt for Murabaha, a financing option that involves the purchase and sale of goods at a markup. This option is particularly useful for those who need to purchase specific items, such as cars or electronics.

Islamic personal financing options also promote financial discipline and responsibility, as borrowers must adhere to strict repayment schedules and terms.

Islamic personal financing offers two main types of loans: Islamic Personal Loan and Conventional Loan. Both products provide financing to individuals, but they differ in their documentation and terminology.

Islamic Personal Loan is based on a contract called an Asset or Commodity Sales Agreement, which can use either Tawarruq or Bai' Al-'Inah concept. This contract is a key difference between Islamic Personal Loan and Conventional Loan.

Conventional Loan, on the other hand, is based on a simple Loan agreement between the borrower and lender. This type of loan is more commonly used in conventional financing.

The financing amount in an Islamic Personal Loan is stated as both the asset sales price and the asset purchase price. In contrast, a Conventional Loan states the loan amount directly.

With Islamic personal financing, you have the flexibility to choose from different financing structures, such as the Shariah-compliant "Goods Murabaha" structure. This structure allows the bank to finance the actual goods you require.

You can opt for a Saadiq Personal Finance product, which is offered for products from specific brands, including Transcom Electronics Limited, Hatil Furniture, and Yamaha Bike.

If you have a salary account with the bank, you'll get preferential treatment on Saadiq Personal Finance, with the fastest processing time in the market.

You can even apply for a Saadiq Credit Card while applying for Saadiq Personal Finance, but you won't be able to avail conventional products in the Saadiq value pack.

One of the benefits of Islamic personal loans is the flexibility to perform an early settlement at any time, with a 'ibra' (rebate) given. This is in contrast to conventional personal loans, which may have a 'lock-in' period where a penalty is incurred if you settle your loan early.

Here are some of the brands that offer Saadiq Personal Finance products:

Islamic Shariah Financing Principles in Malaysia strictly prohibit financing activities that contribute to Riba (paying or charging interest), Haram (investing in prohibited activities), Gharar (uncertainty and excessive risk), and Maysir (speculation or gambling).

Islamic personal loans are structured around two main concepts: Bai’ Al-Inah and Tawarruq.

Bai’ Al-Inah involves a sale contract with deferred payment, where the buyer purchases an asset at a lower cash price than the deferred sale price.

Tawarruq is a contract where the buyer purchases an asset on a deferred basis and then sells it on a cash basis to a third party to obtain cash.

Here are some key Shariah terms you may encounter in an Islamic personal financing application:

These Shariah principles and concepts are designed to provide a fair and transparent financing experience for customers.

The profit rate is a crucial aspect to consider when choosing between an Islamic personal loan and a conventional loan. In Islamic personal financing, the profit rate is earned from buying something on behalf of the customer, as stated in the contract.

The profit rate for Islamic personal financing varies depending on the loan amount. For loans between RM6,000 and RM19,500, the profit rate is 12.5%. For loans between RM20,000 and RM49,500, the profit rate is 11.5%. For loans between RM50,000 and RM150,000, the profit rate is 10.5%.

In contrast, conventional loans charge interest on the principal amount and paid by the borrower. This is a key difference between the two types of loans, and something to consider when making a decision.

With Saadiq Personal Finance, you can make early settlement at any point during the financing tenure, and you'll even get a rebate for doing so. This is a big advantage over conventional personal loans, which often have a lock-in period and penalty for early settlement.

You can choose from a range of products, including electronics, furniture, and even motorcycles, all from reputable brands like Transcom Electronics Limited, Hatil Furniture, and Yamaha Bike. Here are some of the brands you can select from:

If you have your salary account with the bank, you'll get preferential treatment on Saadiq Personal Finance, with the fastest processing in the market. This is a big time-saver, and it's a great incentive to choose this option.