Posted by: islamicfinancingnews | February 7, 2014

What those low ijara loans interest rates mean

 Whether you’re looking at getting an islamic loans usa product or one of the more traditional western types, you’ll have noticed the interest rates have been low for a number of years now. Most experts agree there are advantages and disadvantages to this trap we cant seem to move forward from but there is one imminent danger  for people looking at ijara loans even though they don’t pay the interest directly on the money borrowed.

First and foremost the consumer needs to be careful they don’t fall into the trap of believing these rates will stay where they are forever. What’s credit cardshappening is being called in some circles The Great Borrowing Spree. Here’s how it  works.

Back in the 1990s it wasn’t uncommon for a mortgage to have a rate with double digits, some as high as 14 percent. That meant people had to watch their credit since even a small rise in those rates could spell big trouble. Long story short here was they didn’t have the extra money to buy things on credit or the nerve for it.

In today’s market, you can get a line of credit that’s got a 3.5% interest rate where you have the option to pay only the interest monthly. In effect, that means you can spend $10,000 on a renovation or holiday and only pay a little over $29 a month in interest. However, you still owe that initial amount and that number will go up when the rates eventually hike.

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