Islamic Loan & Qarz-e-Hasana Calculator
Islamic financing is based on the principle of social justice and the prohibition of Riba (interest). This calculator helps you compare a conventional interest-based loan with an Islamic interest-free (Qarz-e-Hasana) loan or a Shariah-compliant banking product.
Islamic Loan Calculator
What is Qarz-e-Hasana?
Qarz-e-Hasana (قرض حسنہ) is an interest-free loan extended by one person or institution to another, purely for the sake of Allah. The borrower is only required to repay the principal amount borrowed, with no additional charges or interest (Riba).
Key Differences: Islamic vs. Conventional Loans
| Feature | Conventional Loan | Islamic Financing |
|---|---|---|
| Nature of Contract | Money for money (Interest based) | Trade of assets (Asset based) |
| Profit/Loss | Lender always earns interest | Profit/Loss sharing or fixed markup |
| Penalty for Late Payment | Interest on interest (compounding) | Fixed penalty often donated to charity |
| Risk | Borne entirely by borrower | Shared between bank and customer |
Types of Islamic Finance Contracts
| Contract | Arabic Name | Description | Usage |
|---|---|---|---|
| Murabaha | مرابحہ | Cost-plus financing. Bank buys asset and sells to customer at profit margin. | Auto, Home, Goods finance |
| Ijarah | اجارہ | Leasing. Bank owns asset and leases it to customer for a fee. | Auto, Machinery finance |
| Mudarabah | مضاربہ | Profit sharing. One party provides capital, other provides labor. Profit shared, loss borne by investor. | Business investment, savings accounts |
| Musharakah | مشارکہ | Joint venture. Both parties invest capital and share profit/loss proportionally. | Business partnerships, project finance |
Qarz-e-Hasana Rules in Islam
- Repay Exact Amount: No interest or condition of benefit to the lender.
- Written Agreement: Commanded in Quran 2:282 for transparency.
- Patience: Lender should grant a delay if the borrower is in genuine hardship.
- Intention: Borrower must have a sincere intention to repay.
Important Disclaimer
This calculator is for educational and planning purposes only. Islamic banking products should be verified through the bank's Shariah board certification.