Quick Answer
Murabaha is an Islamic financing structure: Sale Price = Cost + (Cost × Markup%). Monthly instalment = Sale Price ÷ Number of months. Unlike an interest-bearing loan, the price is fixed upfront — no compounding, no late interest.
What Is a Murabaha Calculator?
Murabaha is a cost-plus financing arrangement: the bank buys an asset at market cost, then sells it to the customer at a declared profit margin. The customer repays in instalments at the pre-agreed fixed total price.
Murabaha is permissible under Islamic law while a conventional loan is not because the bank earns its return through a genuine trade transaction (buying then selling the asset), not through charging interest (Riba) on money lent. Crucially, the total price is fixed at signing — it cannot increase regardless of late payments.
How to Use This Murabaha Calculator
- 1Enter the cost price of the asset the bank purchases on your behalf.
- 2Enter the bank's declared profit markup percentage.
- 3Enter the number of monthly instalments for repayment.
- 4The calculator shows total Murabaha price, monthly instalment, and profit amount.
The Formula Explained
Sale Price = Cost + (Cost × Markup%)Monthly = Sale Price ÷ Number of monthsProfit = Sale Price − CostExample: Car costing PKR 3,000,000 with 12% markup over 36 months
- Murabaha price = 3,000,000 + (3,000,000 × 12%) = 3,360,000
- Monthly = 3,360,000 ÷ 36 = 93,333
Tips & Things to Know
- Murabaha total cost is fixed — paying early doesn't reduce the total (though some banks grant a voluntary discount).
- Murabaha is for asset financing (cars, property, equipment) — not for revolving credit or cash loans.
- Ensure the bank genuinely purchases the asset before selling it to you — a paper transaction without real ownership is not permissible.