Islamic bank loans work differently from conventional loans because they follow Islamic principles, which prohibit charging or paying interest. Instead of earning money from interest, Islamic banks use methods like murabahah and musharakah.
In a murabahah agreement, the bank buys the property you want, sells it to you at a higher price, and allows you to pay in instalments. In a musharakah partnership, you and the bank jointly own the property, and over time, you buy out the bank's share while paying a rental fee for its part of the ownership.
These methods ensure that the transaction is fair, transparent, and compliant with Islamic values.
