01How Murabaha works
Instead of lending you money, the bank buys the asset and sells it to you at an agreed higher price, paid in instalments. The bank earns a profit on the sale rather than interest on a loan.
02What stays the same
You still pay a fixed monthly amount, the bank still checks your salary and credit score, and UAE lending limits still apply.
Murabaha is a sale at an agreed price, not a loan.KEY POINT
03What's different
The total price is agreed upfront and does not compound. Late payment charges are often given to charity rather than kept as income.
04How to compare
Ask for the profit rate and the total amount payable, then compare it with conventional offers on the same tenure.
