The most important question for anyone who is seeking a loan or getting things on lease is the rate of interest that will be charged on that loan. Being a Muslim and living in a Muslim society, most of the time this becomes an indispensable question for us and whether to use the interest to buy a vehicle or not. An alternate to a conventional car loan is the utilization of services of an Islamic banking system such as car Ijarah. In the following sections, we will explain various elements attached to Meezan Car Ijarah product.
Concept Behind Meezan’s Car Ijarah
Meezan’s Car Ijarah is an endeavor on the part of Meezan bank for facilitating its customers to offer an interest-free car financing. This interest-free car financing service is founded on the foundation of Islamic financing / leasing concept called Ijarah. Basically, it is more like a car rental agreement according to which the car is purchased by the Bank and is rented out to the customer for a period of time that is 1-7 years to be precise. This time period is agreed upon when the contract is signed. After this amount of time the car is then gifted to the customer or is sold against the remaing car value.
Car Ijarah Products Offered by Meezan Bank
New car: You can choose from a verity of new models and rejoice riding the car you are desirous of. New cars are financed usually through residual value ijrah offerings by Meezan bank.
Used Car: With Meezan’s Car Ijarah service you can not only get a new car on lease but used cars are also offered through the same procedure as an economical option for those who are looking for an interest free cost-effective offer. The minimum security deposit in this case will be around 15% payable by the customer. These include both locally assembled cars and also imported cars.
Imported Car: As car Ijarah is catering the needs of individual from every strata of our society so along with new and used cars a variety of imported car are also available as car financing option.
Fundamental Features of Meezan’s Car Ijarah Service
The following are the key features of the Meezan’s Car Ijarah offer:
– Minimum upfront payment up to 15%
– The rental payments only starts after car is delivered to a customer
– Quick decisions on the applications
– Free trackers installaiton
– Free accidentials coverage
Note: The detailed eligibility criteria can be reviewed at Mawazna.com car financing comparison service.
Regular Ijarah Model versus Residual Value Ijarah
Residual Ijarah requires from the buyer to pay a certain agreed amount at the end of the Ijarah period in order to own the vehicle. In comparison to the regular Ijarah, it has lower installment’s as the money is compensated at the end of rental period through an agreed sum at the end of Ijraha. Residual ijarah is a service that is offered only on new cars and gets the customer a chance to use the car during the given rental period and return the car to bank without having to buy it. In this scenario it will be more like a leasing instead of buying service. However in regular Ijarah product offering, customers/buyers just pay monthly Ijarah installements and at the end of Ijrah period, customer owns the car.
Maturity of Residual Value Ijarah and Premature Termination
Meezan’s Car Ijarah provides the customers with the flexibility of either buying the car upon maturity or terminating the agreement at a premature stage. However the customer will have to pay an agreed purchased price to the bank.
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