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Halal car financing

Halal Car Financing in Sweden - Zero Interest, Three-Scholar Certified

Quick answer

Bilen Utan Riba is Sweden's first fully Shariah-certified halal car financing. We use the Murabaha (cost-plus sale) structure in the pilot, which means zero interest, no riba, and a contract publicly reviewed and signed by three independent scholars from the Hanafi, Shafi'i and Maliki schools. You pick the car, we buy it, we resell it to you at a fixed price with a pre-agreed markup, and you own it from day one. Fully compliant with AAOIFI Shariah Standard No. 8.

01

What is halal car financing?

Halal car financing is car finance structured to be free of riba (interest), gharar (excessive uncertainty), and maysir (speculation), the three elements that make conventional car loans haram in classical Islamic jurisprudence. There is no such thing as a "halal car loan" in the strict sense; what exists is halal car financing, usually structured as one of three contract types:

  • Ijara (lease-to-own), we buy the car, you lease it, ownership transfers at the final payment.
  • Murabaha (cost-plus sale), we buy the car for X, sell it to you for X plus a pre-agreed profit, you pay in installments.
  • Musharaka mutanaqisa (diminishing partnership), we co-own the car, you buy out our share over time.

Bilen Utan Riba uses Murabaha in the pilot phase because it fits Swedish consumer credit law best - it is structured as a standard purchase over time with a security interest, which is well established in Swedish contract law.

02

Are conventional car loans in Sweden haram?

Yes. Every conventional car loan in Sweden from Volvofinans, Santander Consumer Bank, Resurs Bank, Marginalen, Toveks, and similar lenders is interest-bearing. Whether the rate is 3 percent, 7 percent, or 12 percent does not matter. Riba is riba.

Negotiating a lower rate or finding a 0 percent introductory offer does not change anything. If the underlying contract is interest-based, it remains riba.

Read more: Is a car loan haram? The complete answer.

03

How does Bilen Utan Riba (Murabaha) work?

Four steps, 14 days:

  1. You choose the car. Used or new, from any Swedish dealer. No preferred brands.
  2. We buy the car. Bilen Utan Riba (Ribafri AB) buys the car using our own capital.
  3. You lease the car. Fixed monthly payment, fixed term (36, 48, or 60 months), no interest, no indexation.
  4. The car becomes yours. At the final payment, ownership transfers to you for free.
04

How does the cost compare to a conventional car loan?

Honest answer: monthly cost is typically 5 to 12 percent higher than the cheapest conventional car loan. That premium reflects the real risk we take (we own the car), the absence of interest income, our profit margin, takaful (Islamic insurance), and the Shariah board's fees.

  • A contract you can show your imam without shame.
  • A public fatwa you can link to.
  • No late fees calculated as interest.
  • A 30-day Shariah guarantee.
05

Who is behind Bilen Utan Riba?

The company is Ribafri AB (Swedish limited company). Founder: Rafi Mohammad. The Shariah board consists of three independent scholars (Hanafi, Shafi'i, Maliki schools). Learn more about the founder.

FAQ

FAQ

Is halal car financing legal in Sweden?

Yes. Bilen Utan Riba is a Swedish limited company (Ribafri AB, registration in progress) subject to Swedish consumer credit law, GDPR, and the EU Consumer Credit Directive. The Murabaha structure is compatible with Swedish contract and sales law - we buy the car and resell it to you, which is a standard purchase over time. The contract is reviewed by a Swedish law firm before pilot.

Will you run a credit check?

Yes. We perform a credit assessment like any other car-financing provider, because we need to know you can handle the monthly payment. The difference is in the contract type, not in the credit process.

What happens if I miss a payment?

We do not charge late interest - that would be riba. A small flat administrative fee may be taken to cover actual handling costs, and that fee is donated to charity (sadaqa) because Shariah forbids us from profiting from your delay. This is documented in the contract.

Can I pay off early?

Yes, with no penalty. On early settlement you pay the remaining principal, not remaining months times monthly cost. Our security interest in the car is released immediately upon full payment.

What cars qualify?

In the pilot phase we finance cars up to 350,000 SEK (new or quality-checked used) from Volvo, Toyota, Hyundai, Kia and more. No fundamental brand restrictions - we can evaluate specific requests. The price cap will be raised after pilot.

How is this different from regular private leasing?

Regular Swedish private leasing ends with you returning the car or buying it out at residual value, and includes an interest-based financing component. In our Murabaha structure you own the car from day one, the payment is a fixed price with no interest, and there is no residual-value risk or balloon payment.

Why Murabaha and not Ijara?

Both are Shariah-approved. We chose Murabaha for the pilot because it fits Swedish consumer credit law best - it is structured as a standard purchase over time with a security interest, which is well established in Swedish contract law. Ijara (lease-to-own) is more common for housing and may appear in a future product line.

Read more

Halal car financing

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