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Islamic Car Finance Calculator | Murabaha & Ijara Payments

An Islamic car finance calculator computes payments for the two main halal auto structures. Murabaha: the bank buys the car and resells at cost plus disclosed profit — flat profit = principal × rate × years, spread evenly. Ijara wa Iqtina: reducing-balance lease payments computed like an annuity on the bank's financed amount.

Last updated: September 2026 · Free · No sign-up required

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Min. 10-15% on most halal car finance products.

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Al Rayan, Wahed Auto, ADIB publish current rates.

Results

Enter values above and click Calculate to see your result instantly.

Quick reference

Same $30k car, $6k down, 4.9% profit rate:

TermMurabaha /moTotal profit
36 mo$858.67$3,528
48 mo$598.83$4,704
60 mo$536.00$5,880

receipt Profit is fixed

Murabaha profit is agreed upfront as a number, not a floating interest rate — late-payment penalties are charity-bound, not income.

home_work Ijara trade-off

Ijara's reducing rent costs less overall than flat Murabaha profit on long terms, but the bank owns the car until final purchase.

payments Deposit effect

Every $1,000 extra deposit saves roughly $196 of Murabaha profit on a 4-year 4.9% deal.

handshake Early settlement

Reputable contracts rebate unearned profit on early payoff — ask for the rebate formula in writing before signing.

lightbulb A real example — $30,000 car on Murabaha

$30,000 car, $6,000 deposit, 48 months, 4.9% annual profit rate.

Result: Monthly payment ≈ $598.83; total profit $4,704 on $24,000 financed.

What this means: Extending to 60 months drops the payment to $536 but raises total profit to $5,880 — 25% more cost for $63/month less.

Formula & methodology

Formula: Murabaha: monthly = (P − D)(1 + r·y) ÷ n; Ijara: monthly = standard reducing-balance annuity on (P − D)

Two halal structures, two maths

Murabaha is a cost-plus sale: the financier buys the car you choose and sells it to you at a disclosed profit. Profit is computed flat on the financed amount: profit = (price − deposit) × rate × years, then divided by months into level installments. Early settlement typically rebates unearned profit.

Ijara wa Iqtina is lease-to-own: monthly rent on a reducing balance (like an annuity) plus eventual transfer of ownership. Later-year payments are interest-light by construction because rent follows the bank's remaining ownership share.

Example: $30,000 car, $6,000 down, 48 months at 4.9% — Murabaha profit = $24,000 × 0.049 × 4 = $4,704 → $598.83/month.

Frequently asked questions

How is a Murabaha car payment calculated?
Financed amount × profit rate × years gives total profit; add the financed amount and divide by months. $24,000 financed at 4.9% for 4 years = $4,704 profit → $598.83 monthly.
Is Islamic car finance actually different from a loan?
Economically the payments look similar, but legally the bank owns/resells the asset (Murabaha) or retains ownership during lease (Ijara) — profit is from trade or lease, not interest on a money loan.
Murabaha or Ijara — which costs less?
On the same rate and term, Ijara's reducing-balance rent usually totals less profit than flat Murabaha profit, especially beyond 48 months. Compare both above before choosing.
Can I pay off Islamic car finance early?
Yes. Contracts typically rebate the unearned portion of Murabaha profit; there should be no penalty beyond an admin fee — check your agreement's early-settlement clause.

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