Meezan Bank offers a unique and groundbreaking car financing product known as Car Ijarah, which stands as Pakistan’s inaugural interest-free car financing option. Operating on the principles of Islamic finance and the mode of Ijarah (leasing), it provides an excellent opportunity for individuals seeking interest-free financing for locally manufactured or assembled vehicles.
The mechanics of Car Ijarah operate through a car rental agreement. Under this agreement, Meezan Bank procures the vehicle and leases it to the customer for a pre-agreed period, ranging from 1 to 5 years, as determined at the time of entering the contract. Once the Ijarah period concludes, the vehicle can be sold to the customer at a token amount or even gifted to them.
Key Features of Meezan Women First Car Ijarah:
- For locally manufactured vehicles above 1000 CC, the financing period spans from 1 to 3 years.
- Alternatively, for locally manufactured vehicles up to 1000 CC, the financing period extends from 1 to 5 years.
- A minimum security deposit or advance rental of 30% is required for all vehicles.
- The maximum financing amount is Rs. 3 million, constituting the Net Financing Amount.
- Notably, there are no processing charges, as Meezan Bank offers a 100% waiver in this regard.
- Documentation and security charges are to be paid by the applicant based on actuals.
- The bank covers the With Holding Tax (W.H.T) for the purchase of the vehicle.
- Rental payments commence at a discounted rate after the vehicle is delivered.
- Monthly rentals are paid through Direct Debit Instructions (DDI) from a PKR Meezan Bank Account.
- There are no charges or restrictions on the early termination of the vehicle, with a complete waiver of associated costs.
- The program boasts the lowest upfront payment along with priority processing.
Eligibility Criteria:
For Salaried Individuals:
- Permanent employees need to have a minimum of 3 months in their current job and a continuous employment history of at least 2 years.
- Contractual employees should have spent at least 6 months in their current job with a continuous employment history of a minimum of 3 years.
- The net take-home income should exceed twice the monthly rental, inclusive of takaful.
- Spouse’s verifiable income can be clubbed to an extent of 50%.
- In the case of existing loans, the total of all monthly payments, including the proposed Ijarah rental, should not exceed 40% of the net/take-home income.
- Both data checks and e-CIB checks should be clear, without any current defaults or overdue payments at the time of case approval.
For Women Entrepreneurs:
- Women entrepreneurs should have a minimum of 2 years of continuous involvement in their current business/industry.
- They can hold positions as proprietors, partners, or directors (in which case, the percentage of sharing/holding will be considered).
- Similar to salaried individuals, the net take-home income should be at least twice the monthly rental, inclusive of takaful.
- Spouse’s verifiable income can be clubbed to an extent of 50%.
- In the case of existing loans, the total of all monthly payments, including the proposed Ijarah rental, should not exceed 40% of the net/take-home income.
- For small-scale women entrepreneurs with cash income, income estimation will be conducted to assess income. Up to 50% of the net/take-home income will be allowed for locally manufactured or assembled vehicles with an engine capacity of up to 1000 CC.
- Both data checks and e-CIB checks should be clear, without any current defaults or overdue payments at the time of case approval.
In essence, Meezan Bank’s Car Ijarah product offers an innovative and interest-free way for individuals to finance their vehicles. With flexible terms and eligibility criteria tailored to both salaried individuals and women entrepreneurs, it provides a unique opportunity to acquire vehicles in a Sharia-compliant manner. The transparent process and favorable terms make it an attractive option for those looking to get behind the wheel of their dream car.
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