1. What is Bank Islam Financing?

Bank Islam Malaysia provides Sharia-compliant financing solutions based on Islamic principles. Instead of interest (riba), the bank uses profit rates in its financing calculations.

2. How Does the Calculator Work?

The calculator uses the Islamic financing formula:

Where:

• \( P \) — Principal financing amount (MYR)
• \( r \) — Monthly profit rate (annual rate divided by 12)
• \( n \) — Total number of monthly payments
• \( PMT \) — Monthly payment amount (MYR)

Explanation: This formula calculates equal monthly payments that include both the principal amount and the bank's profit.

3. Understanding Sharia-Compliant Financing

Details: Unlike conventional loans, Islamic financing is asset-backed and avoids interest. The bank earns through profit rates agreed upon in the contract.

4. Using the Calculator

Tips: Enter the principal amount in MYR, annual profit rate in percentage, and loan term in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Is this calculator Sharia-compliant?
A: Yes, it uses the standard Islamic financing formula approved by Sharia scholars.

Q2: How does Islamic financing differ from conventional loans?
A: Islamic financing is asset-backed, avoids interest (riba), and shares risk between bank and customer.

Q3: Can I get early settlement benefits?
A: Bank Islam may offer rebates (ibra') for early settlement, calculated differently from conventional loans.

Q4: Are there other Islamic financing structures?
A: Yes, including Murabahah (cost-plus), Ijarah (leasing), and Musharakah (partnership) models.

Q5: How accurate is this calculator?
A: It provides estimates; actual financing terms may vary based on bank policies and individual circumstances.