Posted by: islamicfinancingnews | January 18, 2014

A few words on payment options for your Islamic loans

There are some things you’ll need to become familiar with that are more about traditional mortgages than Islamic loans. Of course you can steer away from riba with Islamic finance, but there’s still a need to understand your options when it comes to payment frequencies and what each means to the overall length of time you’ll need to pay off your mortgage.

  • Monthly. This is the most common type of payment and the one that’s quite often the first choice of people starting out with their first home. Although this option doesn’t decrease the amount you owe as fast as some of the others, it’s easier for new homeowners to fit this payment into a new budget. Some of the other possibilities need a more experienced hand at money management.
  • Accelerated. Like the name suggests, these are the other options that include weekly and bi-weekly payments. With these accelerated options, your payment goes up slightly, but you wind up saving thousands in interest payments and your mortgage gets paid off sooner.

This is something to consider even when you’re dealing with Islamic finance. It’s a good idea to become familiar with all your choices when you start looking at real estate.

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