Understanding Meezan Bank Car Ijarah

As the world progresses and evolves, so do our financial needs and requirements. The demand for Islamic banking and financial services has grown significantly. To cater to this increasing demand, Meezan Bank, a leading Islamic bank in Pakistan, offers a unique financing solution called “Car Ijarah.”

This blog will delve into the concept of Car Ijarah and explore its key features, benefits, and how it aligns with Islamic principles.

What is Car Ijarah

What is Car Ijarah?

Car Ijarah is a Sharia-compliant car financing product that allows individuals to acquire a vehicle without resorting to conventional interest-based loans. Meezan Bank acts as the lessor (owner of the asset) while the customer becomes the lessee (asset user) under a leasing arrangement. It is important to note that Car Ijarah is not a loan; instead, it is a lease contract based on the principles of Ijarah (Islamic leasing).

Key Features of Meezan Bank Car Ijarah

Key Features of Meezan Bank Car Ijarah

No Interest:

One of the fundamental principles of Islamic finance is the prohibition of interest (riba). Car Ijarah adheres to this principle by eliminating any interest charges. Instead, the customer pays a fixed monthly rental amount that covers the depreciation and usage of the vehicle.

Asset Ownership:

Although the bank retains ownership of the vehicle throughout the leasing period, the lessee enjoys the benefits of using the car. The bank assumes the risk of ownership, while the customer will be responsible for the maintenance and insurance of the vehicle.

Flexible Tenure:

Car Ijarah offers flexible tenures ranging from 1 to 7 years, allowing customers to choose a period that suits their financial capabilities. The monthly rentals remain fixed throughout the agreed-upon term, providing stability and ease of budgeting.

Early Termination Option:

Meezan Bank provides an early termination option, allowing customers to settle their lease agreement before the agreed term ends. However, certain conditions and charges may apply, depending on the circumstances.

Benefits of Meezan Bank Car Ijarah

Benefits of Meezan Bank Car Ijarah

Sharia Compliance: For individuals seeking financial products aligned with Islamic principles, Car Ijarah is an attractive option. It offers an alternative to conventional car financing, ensuring compliance with Sharia law.

Budget-Friendly: The fixed monthly rentals in Car Ijarah make it easier to plan the finances. No interest-related surprises or fluctuations give customers stability and predictability in their financial commitments.

Convenience and Ease: Applying for Car Ijarah is streamlined and hassle-free. Meezan Bank aims to provide convenience to its customers by offering simple documentation requirements and swift processing times.

No Hidden Charges: Car Ijarah is designed to be transparent, with no hidden charges or additional costs. The rental amount and associated fees are communicated upfront, enabling customers to make informed decisions.

Eligibility Criteria for Meezan Bank Car Ijarah

Salaried Persons:

  • A minimum of 2 years of continuous employment is required for permanent employees.
  • Must be in the current job for at least three months.
  • A minimum of 3 years of continuous employment is required for contractual employees.
  • Must be in the current job for at least six months.

Business Persons:

  • Applicants must be actively involved in their current business or industry for at least two years.
  • Eligible positions include proprietor, partner, or director.
  • The percentage of sharing or holding will be considered in the case of partners or directors.

Net Take Home Income:

  • Net take-home income should be at least twice the monthly rental amount, including takaful (insurance) charges.

Spouse’s Verifiable Income:

  • The spouse’s income can be considered and clubbed with the applicant’s income up to 50% for calculation purposes.

Debt Burden Ratio:

  • All monthly payments, including the proposed Ijarah rental, should not exceed 40% of the net or take-home income.
  • This includes any other existing loan obligations.

Data Check and e-CIB:

  • Applicants should have a clear data check and e-CIB (electronic credit information bureau) report.
  • There should be no current defaults or overdue payments at the time of case approval.

Documents Required for Meezan Bank Car Ijarah

Salaried Individuals:

Latest Employment Certificate: A certificate from the employer indicating the date of joining and current employment status.

Last Six-Month Credited Salary Bank Statement: A bank statement showing the salary deposits for the past six months.

Nominee CNIC Copy: A copy of the nominee’s Computerized National Identity Card (CNIC).

Employer’s HR Representative Details: The name and mailing address of the HR representative of the applicant’s employer.

Credit Bureau Report: A credit report from the stay country’s credit bureau.


Valid Business Proof: Document(s) providing evidence of the business’s existence and legitimacy.

Last Six-Month Verified Bank Statement: Bank statements for the past six months, duly verified through the embassy.

Nominee CNIC Copy: A copy of the nominee’s Computerized National Identity Card (CNIC).

Credit Bureau Report: A credit report from the stay country’s credit bureau.

Remittance Income: If the applicant’s income is derived from remittances, the last six months’ bank statements of the remitter would be required.