Here's how you can get an interest-free car loan from Meezan Bank

 Here's how you can get an interest-free car loan from Meezan Bank

Meezan Bank's Car Ijarah is Pakistan's first interest-free car financing solution that operates on the principles of Islamic finance. It is intended for individuals who wish to acquire locally manufactured/assembled vehicles without paying interest.

Under Car Ijarah, the bank and the customer enter into a car rental agreement where the bank buys the vehicle and leases it to the customer for a period of 1 to 5 years as agreed in the contract. At the end of the Ijarah period, the vehicle is either sold for a nominal amount or gifted to the customer.

This financing product is an excellent option for individuals who want to purchase a car but cannot afford to pay the full amount upfront. It provides a transparent Sharia compliant financing option that does not involve any interest transactions.

Function:

Meezan Bank's Car Ijarah, Pakistan's first interest-free car financing solution, offers the following key features:

Shariah Compliant Financing: Car Ijarah operates on Islamic financing principles and is a Shariah compliant financing option.

Interest Free Financing: Customers can get locally manufactured/assembled vehicles without paying any interest on the financing amount.

Flexible financing terms: Meezan Bank’s Car Ijarah offers flexible financing terms that allow customers to choose repayment terms from 1 to 7 years depending on their financial capacity.

No Hidden Fees: There are no hidden fees associated with Car Ijarah financing. All charges and fees are clearly disclosed at the time of contract.

Transfer of Ownership: At the end of the Ijarah period, the customer can either purchase the vehicle for a nominal amount or gift it to someone else.

Hassle-free financing: The financing process is simple, fast and hassle-free. Customers can apply online and bank representatives will guide them through the process.

Wide range of vehicles: Meezan Bank's Car Ijarah offers financing for a wide range of locally manufactured/assembled vehicles, including cars, SUVs and pickups.

Eligibility Criteria:

Below are key points regarding the financing options offered for new locally assembled and fully assembled (CBU) vehicles:

Deposit / Deposit: The applicant is required to pay a minimum of 15% and a maximum of 50% of the vehicle price as a deposit or deposit.

Credit History Check: Applicant's credit history will be checked through data check as well as e-CIB and there should be no arrears or late payments at the time of case approval.

Available to Roshan Digital Account Holders: This feature is available to all Roshan Digital Account Holders including foreign currency account holders.

No Processing Fees: There are no processing fees, but the applicant must pay documentation and security integrity fees at the time of payment.

Monthly Rentals: Monthly rentals will be paid by direct debit from PKR Roshan's digital account.

Delivery of Vehicle: The vehicle will be delivered to the nominee or co-borrower who must be a blood relative of the applicant such as father/mother, son/daughter, brother/sister or spouse resident in Pakistan.

Age Limit of Candidate/Co-Borrower: Eligible candidate or co-borrower should not be more than 70 years at the time of maturity of Ijarah.

Advance tax: If they are not declared, a 4% advance tax on the price of the vehicle will be applied when the vehicle is issued.

Applicant Age Limit: The applicant must be at least 25 years old and the maximum age limit at the time of maturity is 60 years for salaried professionals and 65 years for entrepreneurs/self-employed.

Employment/Business History: Applicant must have a minimum of 2 years of continuous employment in their current job for salaried professionals and a minimum of 3 years of continuous involvement in their current business/industry for traders/self-employed professionals.

Debt-to-Income Ratio: If the applicant has availed of other financing options, the combined monthly repayments, including the proposed Ijarah rental, should not exceed 40% of their net income/take home.

Product Profit Rate*

Fixed profit rates

Financing Duration 1 year 2 years 3 years 4 years 5 years 6 years 7 years

For Lien 7.25% 8.25% 8.50% 9.00% 9.25% 9.35% 9.50%

for the uninsured 16.08% 15.38% 14.77% 14.27% 14.17% 14.21% 14.23%

The above rates may be revised based on advance payment and PKRV rate at the time of payment

Variable rates of profit

For lien *Minimum SBP + 1.0% (*Currently minimum SBP is 8.75%)

No collateral 1 year KIBOR + 1.0%

*The profit rates above are not applicable to Takaful and Tracker

Takaful rates

Value-added tracking services

EFU 1.99% accidental death cover up to PKR 2.5 million

1.99%

Adamjee 1.99% -

3.50% – Accidental Death Cover up to PKR 2.5 million

– Health Insurance Plan up to 20.00% of vehicle or PKR 500,000 whichever is less

- Online medical advice

– Travel Takaful Plan up to USD 50,000

Required documents:

For salaried individuals, the following documents are required to apply for Meezan Bank car finance under Car Ijarah:

Confirmation of employment with start date

Bank statements with salary credited for the last six months

Copy of candidate's CNIC

The name and postal address of the employer's personnel representative

Credit Bureau report from country of residence

The following documents are required for entrepreneurs:

Valid proof of business

Verified bank statements for the last six months through the embassy

Copy of candidate's CNIC

Credit Bureau report from country of residence

In the case of income from remittances, bank statements of the remitter for the last six months would also be required.