1. What is Bank Islam Personal Loan?

Bank Islam Malaysia offers Sharia-compliant personal financing based on the concept of Tawarruq (commodity Murabahah). This calculator helps estimate monthly payments according to Islamic financing principles.

2. How Does the Calculator Work?

The calculator uses the Islamic financing formula:

Where:

• \( P \) — Principal amount (MYR)
• \( r \) — Monthly profit rate (decimal)
• \( n \) — Number of months
• \( PMT \) — Monthly payment (MYR)

Explanation: The formula calculates fixed monthly payments that include both principal and profit portions, structured to comply with Islamic finance principles.

3. Importance of Sharia-Compliant Financing

Details: Bank Islam's personal financing avoids interest (riba) and instead uses a transparent profit rate structure based on actual trade transactions with commodities.

4. Using the Calculator

Tips: Enter principal amount in MYR, monthly profit rate as decimal (e.g., 0.005 for 0.5%), and loan term in months. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How is this different from conventional loans?
A: Instead of interest, Bank Islam charges profit based on actual commodity transactions, making it Sharia-compliant.

Q2: What is the typical profit rate?
A: Rates vary but typically range from 4-8% per annum (0.0033-0.0067 monthly). Check with Bank Islam for current rates.

Q3: Are there other fees involved?
A: There may be processing fees or takaful (insurance) charges. These are not included in this calculation.

Q4: Can I settle the financing early?
A: Yes, with possible rebate (ibra') on unearned profit according to Sharia principles.

Q5: Is this calculator accurate for actual financing?
A: This provides estimates. Actual financing terms may vary based on Bank Islam's assessment and current offerings.