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*Originally posted by Fraudz: *
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why on earth would someone overpay? if there are ppl like that out there who insist on making payments after they have paid off their mortgage ask them to pay some of mine too. and that logic applies to islamic banking too, what if u have paid the loan off and are still making payments....
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:) you are right, why on earth would one OVERPAY. I guess I should have been more elaborate.
Lets say your monthly payment is calculated to be $ for 30 years (meaning $360000 will be paid at the end of 30 years)... if you pay $1000 extra (OVERPAY) in first month, you off your loan 6 months less then original period.... getting my drift?
Instead of trying to come up with all these convulusions, why not admit it and modify / update the religion to accept interest as a necessary and fair compenstation for using other's money?
:) you are right, why on earth would one OVERPAY. I guess I should have been more elaborate.
Lets say your monthly payment is calculated to be $ for 30 years (meaning $360000 will be paid at the end of 30 years)... if you pay $1000 extra (OVERPAY) in first month, you off your loan 6 months less then original period.... getting my drift?
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and what is the value of this $1000 in year one vs. year 30? :)
the fixed total cost is based on certain parameters which are part of teh agreement, breaking some of those parameters is allowed and some have fines associated with them. Pay it off early.. no worries, you took advantage of an option which was available to you per original contract.
but do check with the so called islamic lending folks. If you have 360 payments of 1000 each and after 120 payments you decide to pay the rest off..would they still demand that you pay the same total amount? not from what I was told.
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*Originally posted by TomSawyer: *
Instead of trying to come up with all these convulusions, why not admit it and modify / update the religion to accept interest as a necessary and fair compenstation for using other's money?
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It is not a question of modifying or updating the religion it is about still looking at the spirit and reasoning of disallowing ribaa, i.e. predatory lending or loan sharking. there need to be more people with theology and economics/ finance expertise to make a call on it and put this to rest once and for all.
I agree with Fraudiya. ISlam is correct when it admonishes against Usury and extortion, which are obviously harmful transactions. I am not sure if it is asking one to condemn interest but those who use interest or profit or whatever for harmful means. Which is indeed a noble cause.
its intresting to see hindus replying (even though silly replies) more than muslims to an issue which is of no concern to them....
anyway, both forms r seen as interest (and hence haraam) by some scholars....
and knowing that dealing in interest means facing severe punishments from Allah, we shud try to avoid all transactions which hold doubts regarding the interest issue....
^ and cover your face with a blanket, all our problems will solve inshallah.
The problem is that muslim scholars are incompetent in soving issues of modern day. They just make general public more confuse due to thier lack of ability to devise a consensus among themselves.
ps. Islam does not have a copyright to mullahs. Anyone can discuss any issue according to thier knowledge and understanding.
^
instead,
u cud free urself from the blanket of islam and solve all ur problems....
the problem is that present-day muslims are incapable of understanding issues of Islam....
they just make themselves more confused due to their lack of ability to adhere to the principles of Islam and due to their unacceptance of leaving worldly pleasures....
PS. mullahs may not have copyright to Islam but it doesnt seem good for a cricket player to be making rules for volleyball....
Well, that can be “considered” the “inflation” part of the interest being charged. BTW, do you think $1000 would be $6000 in 30 years?
$3000 overypayment in first 3 months saves you $23000… is that also due to “inflation” thingie?
To my understanding… the advantage of overpayment or disadvantage of no payment should not depend upon “some percentage”. It should be some fixed amount of “penalty” or “benefit”.
You don’t have to look at some “so called Islamic lending folks” to see if thats how Allah swt wanted a non-interest financial system to work. They could very well be exploiting the faith of consumers just as mullahs exploit our faith back-home.
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*Originally posted by Matsui: *
No I mean Usury=extortion. Loan sharking etc...that is haraam as it should be common sense. But the interpretation os the scripture to deem "interest or profit " haraam and equate it to Riba, whether for similar or different commodities is incorrect.
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But I insist that interest involved in the transaction of different commodities is not riba. Only interest involved in the transaction of similar and same commodities is riba. As a non-religious person, I am not suppose to talk of "Hallal" or "Harram". But I can talk of "legitimate" or "illegitimate", "logical" or "illogical" etc.
Interest involved in transaction of different commodities is quite logical and it is quite legitimate. I can purchase a thing worth Rs.10000/- for Rs.15000/-. Why? because I personally value that thing equal to Rs.15000/-. Or I may be buying it on installments and think it convenience to make more payment than what had do pay at once. It is logical. It is legitimate also. Because value of that thing is equal to Rs.15000/- at that time.
But to exchange Rs.10000/- for Rs.12500/- is not logical. Rs.10000/- are not equal to Rs.12500/-. Rs.10000/- are only equal to Rs.10000/-.
But if one says that to pay extra Rs.2500/- is the payment for using the principal sum over a certain period of time. Here I can answer this only in commercial sense. In Economics, Production Theory suggests that there are four factors of production which are land, labour, capital and organization. These four factors of production generate overall income of the society. According to Income distribution theory, this overall income is to be divided among only these four factors of production. It means that only the factor income is considered the legitimate. In this particular case, Rs.2500/- is not a factor income because money is not a factor of production. Bare money can produce nothing if kept for as long period as you can. Since there is no Production, there is no income and therefore no claim on income arises. There is no income has been generated so payment for using bare money over a period of time is not logical. It is Illagitimate form of income according to income distribution theory of Economics.
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*Originally posted by armughal: *
PS. mullahs may not have copyright to Islam but it doesnt seem good for a cricket player to be making rules for volleyball....
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^ this is why I suggested that people should have a good handle on economics/financial amrkets and theology, and other areas like sociology etc etc.
Do we really think that our typical run of the mill supposed political scholars have enough of a background in either?
someone has posted a curriculum of the jamiah/institute that these guys get their sanads/diolomas from and the curriculum was just not up to date.
Religion is simple, it has been made simple, its people who complicate it.
*Well, that can be "considered" the "inflation" part of the interest being charged. BTW, do you think $1000 would be $6000 in 30 years? *
inflation part of the interest? huh... whatchu talking bout bub
To my understanding... the advantage of overpayment or disadvantage of no payment should not depend upon "some percentage". It should be some fixed amount of "penalty" or "benefit".
well..disadvantage of no payment is a standard late fee. as far as advantage goes. it is based on a fixed amount in relation to the total loan.
when you overpay by 1 dollar u can easily find out what is the fixed amount of benefit you are deriving from that overpayment
*You don't have to look at some "so called Islamic lending folks" to see if thats how Allah swt wanted a non-interest financial system to work. They could very well be exploiting the faith of consumers just as mullahs exploit our faith back-home. *
non-interest or non-loan-sharking..that question remains for some. I would think that with time value of money involved,
*Originally posted by Fraudz: *
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inflation part of the interest? huh… whatchu talking bout bub
lets ignore that part bub
**well..disadvantage of no payment is a standard late fee. as far as advantage goes. it is based on a fixed amount in relation to the total loan.
when you overpay by 1 dollar u can easily find out what is the fixed amount of benefit you are deriving from that overpayment**
I showed you in my last post that the advantage in overpayment is NOT fixed… as $1000 gave benefit of $6000 while $3000 gave an advantage of more than $20000… its not FIXED… it varies from amount to amount.
**non-interest or non-loan-sharking..that question remains for some. I would think that with time value of money involved, **
