I do not like islamic property loan

When I attending my property investment class in 2010, my mentor shared with us his islamic loan offer letter.

Borrow 678K but ballooned to more than 2 million at the end of the day.

If by calculations using conventional interest rate, the total repayment should be double of your sum of borrowing.

At that time, my mentor told us to avoid ISLAMIC loan at any cost.

But if you are only qualified for islamic loan just be it and take it.

When u sign spa, the docs thicker than conventional loan

Its just a little less transparent because of the complicated manner they put things. Difficult to count outstanding balance also. But you can sometimes get better deals such as ah tuck mentioned lower stamp duty etc.

islamic loan...they have cap at a ceiling rate of between 10% to 10.75%.

But just be aware that Islamic stamp duty is cheaper by 20%.. due the extra loan documents for Islamic..it turns out to be same fees as conventional..

If u have islamic loan, your ccris may have higher loan amount shown.. just inform the banker and they will know what to do if u are planning to take another housing loan..

If floating rate type - if BBA type of Islamic loan - then usually got ceiling rate - b'cos bank have to calculate and declare to you a final sale price.The ceiling rate, if applicable, should be clearly stated in the letter of offer.

The part about the stamp duty is true - b'cos more document needed, the increase stamping cost negates whatever stamp duty discount

Also Islamic loan documents are very difficult to read - even lawyers gave up and ask you to just sign.

You can only hope that the bank doesn't pull any funny tricks after you have signed.

In some of my friend case for instance, letter of offer say lock-in is 3 years, document say 5 years. Lawyer say bank won't change it for me. (In the end just sign, since buying for own stay. Too tired to argue).

It is already 4 year past since they first introduce in the early 2010, infancy stage.

It could be better now but i believe still the same in term of all the content.