Fellow Muslims, getting a loan without interest from an Islamic Bank in the UK?

How like a fawning publican he looks!
I hate him for he is a Christian;
But more for that in low simplicity
He lends out money gratis, and brings down
The rate of usance here with us in Venice.

HSBC does an Islamic finance account.

Reply 82

farhiyaserar

i have actually heard that it isnt interest but inflation is that true??

Reply 83

Original post by farhiyaserar

i have actually heard that it isnt interest but inflation is that true??

No, read the thread.

Reply 84

Inflation is interest, and just as unacceptable to Islam as taking out a mortgage at 4.9% APR.

If it was acceptable, surely such a situation would have been foreseen, and an exception would have been made in the Koran, after all, it is perfect, no? :biggrin:

Besides, it isn't open to interpretation either, this question has arisen countless times since the fourteenth century and scholars all more schooled in all the tenets of Islam and long since dead have ruled thusly.

Today's Islamic loans are basically repayment+interest (bad) simply lumped together and called a larger repayment (good). The logic that it is somehow 'different' and therefore acceptable, is twisted and bizarre.

Why do religious people of all descriptions find the rules of their holy books so cumbersome when going about their daily lives, trying to live according to rules set in stone centuries ago, is it any surprise they need to be bent, twisted and 'interpreted' when they find them so very inconvenient when it comes to their modern lifestyle?

Either accept it and live by these rules, or don't accept it, and live by those of society, (from which religion takes many rules, but eschews others) which is what normal people do.

Reply 85

Shani

6

Original post by marcusfox

Either accept it and live by these rules, or don't accept it, and live by those of society, (from which religion takes many rules, but eschews others) which is what normal people do.

~~Amen.~~

Ops I mean, well said.

:smile:

Reply 86

MehMachine

If a bank is charging you the "rate of inflation" as the rate of interest, the point is the cancel each other out, they are not making any money off you. Because the money has devalued at exactly the same rate at which you have paid it back. So in terms of real capital exchanging hands, its been exactly the same. A bank or any lender starts to make money off you when they charge you a higher interest rate than what inflation is.

If you do go for any Islamic loan or other package tailored to Muslims, all they have done is changed a few words to set your conscience at ease. Even the Islamic Bank of Britain refers to mortgages (thats what they really are :wink:

) as "housing" packages. Where you pay essentially a massive set of payments on the house in a row. They refer to the payments as "rent" rather than what we all know they are... Mortgage repayments. If any financial institution wants to have any capital base or lending power they will need to factor in inflation. As eventually if a higher rate of inflation set in, they would find themselves with less and less money.

Use student finance. It would be a very sad day for you to look back at the potential of a state funded university education which less than 5% of the worlds population enjoy. Only to have turned it down because your "religion" keeps you in a box.

Meh,

Reply 87

Original post by Shani

~~Amen.~~

Ops I mean, well said.

:smile:

I was in Tunisia, a Muslim country, and they have a banking chain called Amen Bank

I'm sure it's halal banking :wink:

(edited 11 years ago)

Reply 88

Camoxide

14

What? A few of my muslim mates are going to uni and are using student loans.

Reply 89

Patchey1000

2

In all seriousness though how, with loans, can Muslims afford their ray gunz?

Reply 90

Original post by Camoxide

What? A few of my muslim mates are going to uni and are using student loans.

That is precisely the point of the thread :wink:

Reply 91

Original post by MehMachine

If a bank is charging you the "rate of inflation" as the rate of interest, the point is the cancel each other out, they are not making any money off you. Because the money has devalued at exactly the same rate at which you have paid it back. So in terms of real capital exchanging hands, its been exactly the same. A bank or any lender starts to make money off you when they charge you a higher interest rate than what inflation is.

If you do go for any Islamic loan or other package tailored to Muslims, all they have done is changed a few words to set your conscience at ease. Even the Islamic Bank of Britain refers to mortgages (thats what they really are :wink:

) as "housing" packages. Where you pay essentially a massive set of payments on the house in a row. They refer to the payments as "rent" rather than what we all know they are... Mortgage repayments. If any financial institution wants to have any capital base or lending power they will need to factor in inflation. As eventually if a higher rate of inflation set in, they would find themselves with less and less money.

Use student finance. It would be a very sad day for you to look back at the potential of a state funded university education which less than 5% of the worlds population enjoy. Only to have turned it down because your "religion" keeps you in a box.

Meh,

Banks don't quite work like that with regards to inflation, because the money they are lending you isn't real money, it is money they've created, so they can charge interest at rates below inflation and still make money in real terms.

Reply 92

MehMachine

Original post by James82

Banks don't quite work like that with regards to inflation, because the money they are lending you isn't real money, it is money they've created, so they can charge interest at rates below inflation and still make money in real terms.

I am aware that bonds and other securities as well as lending between banks does take place in order to move capital and facilitate lending (so called "creation" of money) elsewhere. But generally they need back more than they put out... I used the purchasing of products and the prices changing, usually up (Retail inflation). As a way of explaining why they have to charge a percentage on top for some of the people in this thread to understand :P

Meh,

Reply 93

farhiyaserar

Original post by MehMachine

Use student finance. It would be a very sad day for you to look back at the potential of a state funded university education which less than 5% of the worlds population enjoy. Only to have turned it down because your "religion" keeps you in a box.

Meh,

That's easy for you to say, because to some people (like me) really want to get an higher education but i still don't want to defy my religion for something like this. But then I look at my parents and how they haven't been able to go to university, and it makes me want to make something out of myself. But since interest is one of the big sins it really puts me in a huge dilemma which is to be strong and follow my religion or my dream.

Reply 94

Original post by MehMachine

I am aware that bonds and other securities as well as lending between banks does take place in order to move capital and facilitate lending (so called "creation" of money) elsewhere. But generally they need back more than they put out... I used the purchasing of products and the prices changing, usually up (Retail inflation). As a way of explaining why they have to charge a percentage on top for some of the people in this thread to understand :P

Meh,

It has nothing to do with bonds, securities or inter bank lending and the creating money bit doesn't need to be in quotations, because banks do quite literally create money.

Inflation is basically a measure of how much money the banks have created in a year. Look at it this way, it is illegal for you or I to create money, we'd be sent to prison for forgery, yet prices still keep rising, the population still keeps growing, income still keeps going up (well, maybe not in the last 3 or 4 years, but generally), the money has to come from somewhere, it comes from the banks being allowed to create money to lend to people.

There is also another basic question this raises, how do people pay back interest on loans? We know we can't create money, the only people who legally can are the banks, so the only way people can pay back loans is by borrowing more created money from the banks, thus the supply of money increases, inflation goes up and the cycle continues.

I know there has been a few injections of money into the economy in terms of quantitative easing over the last few years, but this generally doesn't happen and we still see inflation, where does this inflation come from if not the banks?

This is why banks don't have to lend at rates above inflation to make a profit, because it's not real money they're lending, it's new money they've been allowed to create, and it just gets written off once it's repaid and the bank keeps any extra it gets back.

Say the bank loans £100 for a year at 5% interest, inflation is 10%, the bank creates £100 of new money and after a year receives £105 back, it writes off the initial £100 and keeps the £5, the £5 is still worth something, so it's irrelevant that the inflation rate was higher. If they had lent you their money then it would matter, but they don't. But, it's interesting to think 'where does that £5 come from?' We know the people have no way of creating money, so it must be lent to us by the banks.

Reply 95

Saalisa4

2

I'm not quite sure what Islamic banking is like in the UK but I hear it's not very Islamic. And no matter what any scholar says, if Allah has prohibited it, there's no need for their say :rolleyes:

Reply 96

AminaStah

Original post by lukas1051

Huh, you can do this?

Uhh yeah, I'm a Muslam too, interest free loan plz.

I know that HSBC lends you £3000 in your first year interest free providing that you show then a letter of acceptance form a university

Reply 97

Original post by AminaStah

I know that HSBC lends you £3000 in your first year interest free providing that you show then a letter of acceptance form a university

Yeah, but it's not Islamically compatible because when you finish university and you still owe it, the interest free period ends and they charge you interest whether you are a Muslim or not.

Plus their account pays interest on credit balances, so that's against Islam too.

Reply 98