Murabaha / Islamic Finance Calculator
Estimate the monthly installment and total profit on a Murabaha (cost-plus) financing arrangement — the Islamic alternative to an interest-based loan.
How Murabaha differs from a conventional loan
In a Murabaha, the bank buys the asset and sells it to you at an agreed, fixed mark-up — the total price is known upfront and does not change with time. There is no compounding interest on an outstanding balance; the profit is a fixed amount agreed at the start, then divided into equal installments. This is why Islamic scholars consider it distinct from riba (interest), where the charge grows with the unpaid balance over time.
Formula used
Monthly installment = total price ÷ months. The profit is fixed at the start, not compounded.
Frequently asked questions
How is Murabaha different from a loan?
In Murabaha the bank buys an asset and sells it to you at a fixed agreed mark-up. The total price is known upfront and does not compound over time, unlike interest on a conventional loan.
Is the profit fixed?
Yes — the profit amount is agreed at the start and divided into equal installments; it does not grow with the outstanding balance.
Is this an official bank quote?
No — it is an estimate. Confirm exact terms and profit rates with your Islamic bank.