Posted by: islamicfinancingnews | December 1, 2013

Some great tips for paying off Islamic loans faster

Sure, you’ve got Islamic loans and that means you’re safe from riba and staying Sharia compliant, but in the end you’ve still got a conventional mortgage in the sense you need to pay the money back. Of course it’s important to get to the end as quickly as possible, regardless of whether you’ve signed on for Islamic mortgages or the more conventional kind, and here’s a few tried and true ways to be mortgage free faster.

  • Bi-weekly payments. Most of us make a payment on the mortgage once a month, but you can accelerate your payments to bi-weekly and shave years off the amortization schedule. Just be sure you have the ability to put the money together or overdraft protection at the bank so there’s a bit mortgages #3of a lag time between withdrawals and deposits in the account you use.
  • Make a lump sum payment. Usually you can make one lump sum payment each year that gets applied right to the principal. Even a small amount made over a number of years will hack away at the amortization schedule and leave you less time to pay.

Of course with Islamic loans, there’s no need to focus on the corresponding savings you’ll get in interest, but cutting the the overall time to pay is always an attractive possibility.

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