A new Shariah-compliant installment plan from Faysal Bank is set to redefine the car buying experience in Pakistan, promising prospective owners their dream vehicle in just one day. The Faysal Islami Car Finance initiative aims to merge speed with Islamic financial principles, presenting a transparent and convenient solution for consumers. This offering stands out in the crowded auto finance market by providing rapid approvals and competitive rental rates, ensuring customers can get behind the wheel of their new car without unnecessary delays.
The financing structure is rooted in the Islamic principle of Diminishing Musharakah. This is a partnership-based model where the bank and the customer jointly purchase the asset, in this case, a vehicle. This establishes a co-ownership agreement from the outset. Following the joint purchase, the bank leases its portion of the vehicle to the customer for an agreed-upon rental fee. Over the financing term, the customer periodically purchases units of the bank’s share in the vehicle. With each payment, the customer’s ownership stake increases while the bank’s share diminishes, until the customer becomes the sole owner of the car. This method ensures compliance with Islamic laws by avoiding interest-based lending.
Key features of this plan are designed to attract a broad range of customers. The headline feature is, of course, the one-day approval process, which significantly shortens the often lengthy waiting period associated with vehicle financing. The plan covers both new and used locally assembled or manufactured vehicles, offering flexibility in choice. Customers can secure financing for up to 70% of the vehicle’s value. The tenure of the financing is adaptable, extending up to five years for cars with an engine capacity up to 1000cc and up to three years for vehicles exceeding that limit. Notably, no processing fee is charged until the financing application is officially approved, and installments only commence after the vehicle has been delivered to the customer.
Further enhancing its customer-centric approach, the plan includes options for partial pre-payment and early settlement of the financing. A co-partner facility is also permitted, allowing two individuals to apply for financing together. For security and peace of mind, comprehensive Takaful coverage is arranged through reputable insurance providers, and every vehicle is fitted with a tracker. The eligibility for used vehicles extends to models up to nine years old, broadening the market for potential buyers. In a significant move to accommodate diverse income sources, rental income from property is accepted as a primary or supplementary source of income for applicants.
To be eligible, an applicant must be a Pakistani national. The income requirements are structured to be inclusive: salaried individuals need a minimum monthly income of PKR 30,000, those on contracts require at least PKR 50,000, and self-employed professionals or business owners must have a minimum income of PKR 40,000 per month. The age criteria for salaried persons is between 21 and 65 years at the time of loan maturity, while for the self-employed, it is 21 to 70 years. The documentation process is straightforward, requiring standard identification, proof of income, and bank statements to facilitate the swift approval timeline.