There is a difference in what happens if you fail to pay these 110 dollars or if product is broken.
With loan, bank will use a court system to get back its money, and court can size your other property to return your debt, and by the power of small text your fines can unexpectedly outsize the price of the product by one or few orders of magnitude. With Sharia banking you will never pay more than these 110 dollars, and if you fail to pay them, the bank will size that product without using the court as it is legally a property of the bank unless you paid these 110 dollars.
(Warning: I am not a lawyer.)
Yes, I had a personal loan in Qatar, for about 8% APR, but it was never listed as Interest in statements. It was always, maintenance charges.
Re:Digital banking, now halal
by candiodari on Friday September 18, 2020 @11:09AM
(#24517726)
It is called/translated (percentual) administrative costs.
Sharia finance does use interest. They just call it something different. There is no difference between me buying a $100 product using a loan, and paying the bank $110 in total (Western banking), compared to the bank buying the product for $100, and charging me $110 for it (Sharia banking). The fact that it's different words doesn't mean it's not interest.