Top Three Things You Need To Know About Ijarah Financing.
Understanding Ijarah financing is a lot easier when you have a little help. That’s why we thought we’d put together some helpful tips to get you started in the right direction.
Why Avoiding Riba is important
Of course if you’re a Muslim you’ll understand all about riba. However more and more non-Muslims are getting involved with Ijarah financing. It’s important they understand all of the fundamental concepts like riba.
This is the term given by Islam to all forms of unearned income including usury. Islam is very clear about the kind of interest that is gained by lending money and prohibits it. One of the fundamental problems is the interest that can be accrued in this way is not known beforehand.
How to tell if Ijarah financing is trustworthy
It’s important for anyone looking into this type of financing to make sure the product they’ve picked is credible and trustworthy. When it comes to Ijarah financing, there are a few simple tests that will help you.
Make sure that you look for a fatwa or supporting documents. You should be able to track down the Sharia scholars who vetted the company’s process.
Some things are traditional
Although this type of mortgage is different in many ways, it’s the same in others. For example, it’s a good idea to have a decent credit rating before you start the process. Although your credit score isn’t the only factor, it’s an important part of the entire package the lender will look at.
Some of the metrics used are more important than others. For example, a full 35% of your FICO score is based on your payment history. That means it’s a good idea to start paying your bills on time if you haven’t already done so.
Ijarah financing is the right product for Muslims who are looking to stay Sharia compliant.