Free Murabaha calculator. Calculate installments for car or real estate financing using Islamic banking principles.

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💡 Financial Tip: Transparent profitRule
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Murabaha Calculator

Calculate Islamic finance installments and profit margins for car or real estate financing.

Monthly Installment
$2083.33
Total Profit
$25 000
Total Cost (Asset + Profit)
$125 000

Cost Breakdown

📚 Understanding Murabaha Financing

Murabaha is an Islamic financing contract where the bank purchases an asset and sells it to the client at a profit margin. It is a 'cost-plus' arrangement.

Unlike conventional interest (Riba), Murabaha is considered trade. The profit is fixed and known upfront, and there are no penalties for late payment in some strict interpretations.

Example: A bank buys a car for $20,000 and sells it to you for $25,000 over 5 years. Your fixed monthly installment is $416.67.

💡 Islamic Finance Tips

  • Transparency: Ensure the bank discloses the actual cost of the asset and the exact profit margin.
  • Early Settlement: Ask if there is a discount (Tawheed) if you pay off the balance early, though it cannot be legally guaranteed.
  • Ownership: In a valid Murabaha, the bank must take ownership and risk of the asset before selling it to you.

❓ Frequently Asked Questions

Q: Is Murabaha the same as interest?
A: No, Sharia scholars distinguish it as trade (Tijarah). Interest is a charge for lending money; Murabaha is a markup on a physical asset.

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