Muslims in Britain Demand Sharia-Compliant Student Loans

[RampantAndroid]

Interest free loans goes against the western business as usual mindset, so your American banks are probably going to fight the issue.

Personally, I would like to see interest free banking. I like the idea of buying a house, paying an exact set fee for the loan, and going from there.

Who knows, maybe the idea will catch on in the USA and banks will get some real competition.

Interest kinda makes sense. Sucks? Sure. But people get bonds and want returns on them. It's not just business as usual, it's the entire system. It won't happen.

 

[Texashiker]

Interest kinda makes sense. Sucks? Sure. But people get bonds and want returns on them. It's not just business as usual, it's the entire system. It won't happen.

I think its a form of social conditioning. We have been taught all of our lives that we are "supposed" to pay interest on loans. When something comes along that is different then what we have been taught, we reject it.

Those flexible home mortgage rates that helped crash the housing market, what would have happened if flexible mortgage rates never existed?

Personally, I like the idea of paying a set fee, as opposed to paying interest.

Instead of saying a company will give you a home loan of $75k at 3% interest that is compounded yearly, why cant banks charge a flat fee for the loan? That $75k loan is going to cost you a flat fee of $10k, spread out over 15 years. That gives the person real knowledge of how much the loan is going to cost them.

 

[RampantAndroid]

I think its a form of social conditioning. We have been taught all of our lives that we are "supposed" to pay interest on loans. When something comes along that is different then what we have been taught, we reject it.

Those flexible home mortgage rates that helped crash the housing market, what would have happened if flexible mortgage rates never existed?

Personally, I like the idea of paying a set fee, as opposed to paying interest.

Instead of saying a company will give you a home loan of $75k at 3% interest that is compounded yearly, why cant banks charge a flat fee for the loan? That $75k loan is going to cost you a flat fee of $10k, spread out over 15 years. That gives the person real knowledge of how much the loan is going to cost them.

Oh, I'll agree with you here. My point was that banks won't loan you 100k and expect to get only 100k back. A simpler system would def be a great change.

 

[Doboji]

I think its a form of social conditioning. We have been taught all of our lives that we are "supposed" to pay interest on loans. When something comes along that is different then what we have been taught, we reject it.

Those flexible home mortgage rates that helped crash the housing market, what would have happened if flexible mortgage rates never existed?

Personally, I like the idea of paying a set fee, as opposed to paying interest.

Instead of saying a company will give you a home loan of $75k at 3% interest that is compounded yearly, why cant banks charge a flat fee for the loan? That $75k loan is going to cost you a flat fee of $10k, spread out over 15 years. That gives the person real knowledge of how much the loan is going to cost them.

What if I want to save myself some cheese and pay the loan off early?

 

[Fenixgoon]

I think its a form of social conditioning. We have been taught all of our lives that we are "supposed" to pay interest on loans. When something comes along that is different then what we have been taught, we reject it.

Those flexible home mortgage rates that helped crash the housing market, what would have happened if flexible mortgage rates never existed?

Personally, I like the idea of paying a set fee, as opposed to paying interest.

Instead of saying a company will give you a home loan of $75k at 3% interest that is compounded yearly, why cant banks charge a flat fee for the loan? That $75k loan is going to cost you a flat fee of $10k, spread out over 15 years. That gives the person real knowledge of how much the loan is going to cost them.

how is the interest over the life of the loan not a "set fee" that you factor in during your initial mortgage application?

there are plenty of calculators that will tell you what the total amount of interest is. or if you want, you can always do the math yourself

i know that on my car loan, i am paying approximately $1500 (over the course of 5 years) in order to not pay 100% cash up front.

 

[ShawnD1]

there are plenty of calculators that will tell you what the total amount of interest is. or if you want, you can always do the math yourself

Doing the math yourself isn't hard if you know what the monthly payment is. That's generally one of the things a lender will tell you before you sign any papers

I want a car that is $20,000. I chose to pay over 60 months. The monthly payments are $380 per month. What is the cost of borrowing?
60 months * 380 = $22,800
The car was $20,000 so that means the other $2,800 is interest.

Do this calculation on your house payments. Make sure you are sitting down before you do it. The loan can literally double the cost of the house. This is why you should pay that shit off as soon as possible.

 

[Fenixgoon]

Doing the math yourself isn't hard if you know what the monthly payment is. That's generally one of the things a lender will tell you before you sign any papers

I want a car that is $20,000. I chose to pay over 60 months. The monthly payments are $380 per month. What is the cost of borrowing?
60 months * 380 = $22,800
The car was $20,000 so that means the other $2,800 is interest.

Do this calculation on your house payments. Make sure you are sitting down before you do it. The loan can literally double the cost of the house. This is why you should pay that shit off as soon as possible.

right. that's why i dont understand the whole complaint about not having a flat fee for a loan. the fee is the interest, which is easy to calculate.

 

[halik]

Islamic banking is one of the most absurd things I've come across in finance. They're essentially lying to themselves to circumvent a dogmatic rule on earning interest on money.

For example instead of getting a mortgage and paying principal and interest, the bank would buy the property from the seller and then rent-to-own it to the would be borrower. Or they create a legal entity with the bank's would-be mortgage amount and a down payment from the would-be borrower and then lease the property to the would-be borrower, while the legal entity channels the principal portion from the lease payments back to the would-be borrower (akin to paying down the principal port of your mortgage). Derp.

More info:
http://en.wikipedia.org/wiki/Islamic_banking#Principles

 

[xj0hnx]

What if I want to save myself some cheese and pay the loan off early?

You'd still pay the 10K fee. It's a fee for them loaning you more money than you would ever have at one time to buy the house.

 

[WelshBloke]

Beth Din are non-compulsory religious courts for Jews. They can choose to resolve a civil dispute in such a venue if they like, for example. They aren't exempted from any British laws. I fail to see the comparison.

Thats exactly how the Sharia courts in the UK operate as well.

 

[Monster_Munch]

Well, you've already allowed Muslims to have more than 1 wife, and you even pay benefits to them and treat them as a normal family with additional wives. So I'd say it's likely that you'll cave to this too.

I don't believe you. Bigamy is illegal in the UK, you can get 7 years for it.

 

[Doboji]

You'd still pay the 10K fee. It's a fee for them loaning you more money than you would ever have at one time to buy the house.

Well in that case I like the current system better... I'd rather have the option to save myself some money by being responsible.

 

[xj0hnx]

Well in that case I like the current system better... I'd rather have the option to save myself some money by being responsible.

Or, maybe they could prorate the fee, who knows, it's not like that system exist anyway.