In Pakistan’s evolving financial sector, Meezan Bank is leading the way, introducing products such as Car Ijarah, which adheres to Sharia principles and enables customers to obtain car financing without interest. Meezan Bank’s approach to car loans and related details are fully explained in this guide.
Meezan Bank offers a type of Car Ijarah product that allows customers to drive away using a car.
Meezan Car Ijarah is Pakistan’s pioneering interest-free method of purchasing a car by Islamic leasing regulations. Rather than a regular loan, the bank buys the vehicle and allows the customer to lease it for a specified period (1 to 7 years). At the end of the term, the car goes to the customer for a low price or no price (Hibah).
Essential Elements of Car Ijarah
McKinney Sharia-Compliant: No interest is part of the deal, and rents are set once, covering both depreciation and use.
You can select repayment terms ranging from one to seven years.
Easy for Entry: Realty48 begins its security deposits at only 15% for salary-earning individuals and 25% for business users.
With fixed rentals, you know the exact amount you’ll owe every month, regardless of market fluctuations.
The vehicle becomes yours after your lease agreement is finished.
Take lower monthly payments by agreeing to handle 40% to 60% of the car’s original value at the end of the lease.
Eligibility Criteria
Meezan Bank offers car financing to both salaried employees and businesspersons.
If you are a salaried individual.
My ability to reproduce starts between 25 and 60 years old.
You require at least 2 years of continuous experience, with a minimum of 3–6 months of that experience in your current role.
A tenant needs to earn at least twice the monthly rent. Performance agreed under Ijara should not surpass 40% of your income.
If you are your boss or run a business, this database can be helpful.
Sexual maturity typically occurs between the ages of 25 and 65 years.
Must have a minimum of 2 years experience in the existing industry.
With verified bank statements, income can also match salaried conditions.
Anyone with a Roshan Digital Account won’t be charged and must pay in PKR.
Figures on Profit and Cost
Meezan Bank offers both fixed and variable profit rates:
Tenure (Years) Fixed Rate (%) Variable Rate (%)
1 22.26 24.49
5 17.08 24.49
7 16.50 24.49
An interest rate change can occur whenever the market changes.
Additional Charges:
For a processing fee of PKR 2,500 plus Federal Excise Duty (FED), you will be charged.
Accordingly, you are required to get Takaful insurance (at least 1.99%) and have the option of accidental death coverage.
The bank pays Withholding Tax (WHT), but if you do not keep your tax paperwork up to date, you will be charged a 4% advance tax on your car purchase.
Required Documents
Salaried Individuals
- Document showing your employment state (plus joining date).
- A six-month picture of your salary bank statement is needed.
- You will also need a copy of the nominee’s CNIC.
- A credit bureau report is what it’s called.
Business Owners
- You should provide an NTN certificate and your tax returns as proof of business.
- A certified statement from banks covering six months.
- Proprietorship/partnership documents.
Practical Explanation
- File the documents and form at a bank branch.
- The bank reviews your eligibility and checks your credit history.
- Your request is usually processed and approved within 3 to 7 working days.
Residual Value Ijarah is an Economical Way to Finance
Instead of charging monthly rent, this model allows you to defer part of the rental fee to the end of the lease:
The Residual Value is estimated to be 40% after five years and 60% after just one or two years.
Eligibility: Roshan Digital Account holders are not eligible.
Looking at the positives and negatives of Meezan Car Ijarah.
Advantages
Follows Islamic principles because it is interest-free.
I don’t have any hidden costs.
Termination flexibility: Ability to cancel early (based on set rules).
Considerations
According to some, Bitcoin loans come with higher fees than traditional loans.
It is necessary to work with the bank when filing insurance claims.
If you are not filing taxes and owe advance tax, you cannot get a refund.
FAQs
- Does Meezan Car Ijarah not involve interest?
Yes. It sets payments as rentals rather than charging interest, so Sharia guidelines are always followed. - What will happen to me if I miss my loan payments?
Repossession of your vehicle and a decline in your credit rating may result from defaulting. - Is it possible to buy a used car using a loan?
Yes. Purchasing either a brand new or locally reconditioned used car with Meezan requires a 30% down payment. - Do women applicants have any advantages over their male counterparts?
Yes. With the Women First Car Ijarah, you can obtain a car for a low deposit (30%), with no processing fees, and receive quick service. - What is the process behind Residual Value Ijarah?
Instead of paying rent each month, you pay a substantial sum (nearly half to two-thirds of the car’s value) to retain the vehicle when the contract ends.
Conclusion
The Car Ijarah plan from Meezan Bank allows consumers in Pakistan to afford a car with confidence. Being salaried, a businessperson, or an overseas Pakistani, its flexible set-up and confident Sharia approval make it the perfect option. For options that suit your needs, visit any Meezan Bank branch or use their online calculator to estimate payments.
Ready to own your favourite car? Submit your application today to take advantage of Islamic financing tailored to your needs.
You can also visit their website or contact their customer support, which is available 24/7 at 111-331-331.