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Home / Home Loans / Interest free loans for muslims

Interest free loans for muslims

15/06/2009

National Australia Bank has announced it offer a sharia loan product that will appeal to muslims who, under sharia law, are not allowed to pay interest on money.

For example, to get round the Islamic ban on usury - or unfair lending - a Muslim mortgage often works by the bank buying the property, then selling it to the customer at a profit, with the customer then repaying the entire sum in instalments.

"We are dipping our toe in the water with this scheme and thought we may be able to offer this product in high-density Muslim areas," said Richard Peters, head of community finance and development at NAB.

"We suspect there is demand out there, but we don't know how big it is, so we will trial a few products first."

Source: The Daily Telegraph

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