A R300,000 car financed on Islamic terms in South Africa costs roughly R5,100 to R6,900 a month over 48 to 72 months after a 10% deposit, if the rental or profit rate lands near FNB's published Islamic Banking Base Rate of 10.75%. That figure is arithmetic, not a quote. Al Baraka and Absa publish their contract terms but not their rates, and FNB prices each Ijarah relative to its base rate. This guide shows how the monthly number is built, what each provider's rules do to it, where a balloon payment hides cost, and how to run your own numbers before you ask a bank for a written quote.
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How an Islamic car finance instalment is built
South African providers use two contracts. In a Murabaha, the bank buys the car and sells it to you at cost plus a disclosed profit, payable in fixed instalments; the total price is fixed on day one and never changes. Al Baraka's Fixed Instalment Motor Vehicle Finance is a Murabaha with a fixed rate for up to 72 months. In an Ijarah, the bank buys the car and leases it to you for a term, and ownership transfers when the final payment is made. FNB's Islamic Vehicle and Asset Finance and Absa's Islamic Vehicle Finance are Ijarah contracts; Al Baraka offers Ijarah too, in both fixed and variable instalment forms.
The instalment maths is the same in both cases: an amount financed, spread over a term, at an annual profit or rental rate, with an optional residual left to the end. What differs is the label and the legal position. Under a Murabaha you owe a fixed debt for a car you own; under an Ijarah you pay rent on a car the bank owns until the last payment. The difference matters for early settlement, insurance and what happens if the car is written off, which our guide to Islamic car finance structures explains contract by contract.
The five inputs every calculator needs
Any online calculator, including the bank's own, is asking for the same five things. Get each one right and the output is reliable; get one wrong and the monthly figure can be out by a thousand rand.
- Vehicle price including VAT, plus any on-the-road, licensing and extras you want financed rather than paid in cash.
- Deposit. Al Baraka requires 10% on its Murabaha and fixed Ijarah; Absa advertises 100% financing with no deposit; FNB does not state a minimum on its page.
- Term in months. FNB finances private purchases over 12 to 72 months; Al Baraka's Murabaha runs up to 72 months and its variable Ijarah up to 84 months; NBV's rent-to-buy runs 12, 24, 36, 48 or 54 months.
- Annual rate. FNB publishes a 10.75% IBBR reference; Al Baraka and Absa quote on application; NBV sets a fixed rental with no rate at all.
- Residual or balloon. Al Baraka allows up to 30% of the purchase price on its Murabaha and on a 72-month Ijarah; Absa allows a negotiated inflated final payment; NBV has none.
Worked example: a R300,000 car at 10.75%
The table below applies a flat 10.75% annual rate, FNB's published IBBR, to a R300,000 car using standard amortisation. It is an illustration of how the inputs move the instalment, not a price from any bank. Your FNB rate is set relative to the IBBR and may be above or below it; Al Baraka and Absa do not publish rates at all. Figures are rounded to the nearest rand.
| Scenario | Amount financed | Term | Balloon | Monthly instalment | Total paid incl. deposit and balloon |
|---|---|---|---|---|---|
| 10% deposit, no balloon | R270,000 | 72 months | None | R5,105 | R397,538 |
| 10% deposit, no balloon | R270,000 | 60 months | None | R5,837 | R380,211 |
| 10% deposit, no balloon | R270,000 | 48 months | None | R6,946 | R363,387 |
| No deposit (100% finance) | R300,000 | 72 months | None | R5,672 | R408,376 |
| No deposit (100% finance) | R300,000 | 60 months | None | R6,485 | R389,123 |
| 10% deposit, 30% balloon | R270,000 | 72 months | R90,000 | R4,209 | R423,075 |
| 10% deposit, 30% balloon | R270,000 | 60 months | R90,000 | R4,697 | R401,849 |
Three things stand out. Stretching from 48 to 72 months cuts the instalment by about R1,840 a month but adds roughly R34,000 to the total cost. Skipping the deposit adds about R570 a month over 72 months and R11,000 to the total. A 30% balloon takes the 72-month instalment under R4,300 but leaves R90,000 owing at the end and pushes the total above R420,000, the most expensive row in the table. Run the same arithmetic at your quoted rate; a rate two points above the IBBR lifts every instalment in the table by roughly R250 to R300 a month.
What each provider's rules do to the number
The rate is only one lever. Deposit rules, term limits, balloon limits and whether a private sale is allowed decide which rows of the table are even available to you. The rules below are from each provider's own pages.
| Provider | Contract | Deposit | Maximum term | Balloon | Private sales | Published rate |
|---|---|---|---|---|---|---|
| FNB Islamic | Ijarah | Not stated | 72 months (private purchase) | Not stated | Yes | IBBR 10.75% reference |
| Al Baraka Murabaha | Fixed instalment sale | 10% required | 72 months | Up to 30% of price incl. VAT | No | Quote only, fixed for term |
| Al Baraka Ijarah (variable) | Variable instalment lease | Not stated | 84 months (72 with 30% residual) | Up to 30% on 72-month option | No | Quote only, variable |
| Al Baraka Ijarah (fixed) | Fixed instalment lease | 10% required | 60 months | Not stated | No; vehicle max 6 months old | Quote only, fixed |
| Absa Islamic | Ijarah (lease to own) | None; 100% finance offered | Structured to profile | Negotiable inflated final payment | Not stated | Quote only, fixed or variable |
| NBV | Rent-to-buy, no bank | Not stated | 54 months | None | N/A; NBV's own new and demo stock | No rate; fixed rental locked at signature |
Al Baraka's two notes on fees change the total cost picture more than the rate does: there are no monthly admin fees and no penalties for early settlement on its vehicle products. FNB's page is silent on both. Absa's page lists the ability to reduce the monthly rental when you have extra cash, roadside and home assistance bundled in, and a last payment that is treated as the purchase of the asset. NBV states no interest, no finance charge, no late-payment penalty clause, no balloon and no mileage limits, and markets a full income tax and VAT input deduction on rentals for business users. Provider pages: FNB Islamic Banking, Al Baraka Bank, Absa Islamic Banking and NBV.
The balloon trap: what a 30% residual really does
A balloon or residual is the part of the price you do not pay down during the term. On a R300,000 car with a 10% deposit and a 30% balloon, you finance R270,000 but only amortise R180,000 of it; the remaining R90,000 sits there accruing profit or rental for the whole term and falls due in one lump at the end. That is why the balloon rows in the table have the lowest instalment and the highest total. At month 72 you must pay R90,000 in cash, refinance it on a new contract, or sell or trade the car and hope it is worth more than the balloon.
Al Baraka caps its residual at 30% of the purchase price including VAT, and only on the Murabaha and the 72-month Ijarah option. Absa describes the equivalent as a negotiable inflated final payment. If you use one, run the calculator twice: once for the term and once for what refinancing R90,000 over a further 24 or 36 months would cost. The buyers for whom a balloon makes sense are those who replace cars every few years and would trade in before month 72 anyway; our guide to halal car financing in South Africa works through that decision.
Costs the calculator leaves out
The instalment is not the monthly cost of the car. Every financed vehicle must be insured, and for a Muslim buyer that means a takaful policy or an equivalent the bank will accept; FNB lists Takaful on its Islamic pages, and the choice between cooperative and conventional cover is explained on our takaful versus insurance page. Initiation and admin fees differ: Al Baraka states none on its vehicle finance, while FNB and Absa do not list theirs, so ask. Early settlement is free at Al Baraka by its own statement; confirm the position in writing with FNB and Absa before signing, because an Ijarah settled early may involve buying the car from the bank at a stated value rather than simply paying off a balance.
Licensing, tracking devices required by the insurer, service plans and tyres all sit outside the finance. A sensible rule is to add 25% to 35% to the instalment for insurance and running costs before deciding whether the car is affordable, and to keep the instalment itself within a share of take-home pay you could still carry if the household lost one income for a few months.
How to get a real quote in one afternoon
Because two of the four providers do not publish rates, the calculator gets you to a budget but not to a decision. The quickest route to real numbers is to run the same deal past every provider on the same day.
- Fix the deal first: exact vehicle, price including VAT, deposit you can pay, and the term you want. Change nothing between providers.
- FNB: use the dealership or private-purchase application on the Islamic Vehicle and Asset Finance page, or ask the dealer's finance desk to submit to FNB Islamic through WesBank's Islamic channel.
- Al Baraka: run the online calculator on its site for the Murabaha and Ijarah options, then request a written quote; remember the 10% deposit and that private sales are excluded.
- Absa: call 0860 000 786 or apply through an Absa-approved dealer, and ask for both the fixed and the variable rental quotes with and without a final payment.
- NBV: enquire against its listed new and demo stock; the rental is fixed at signature and there is no rate to compare, so compare total cost over the chosen term instead.
- Put all four on one page: instalment, total of payments, balloon, admin fees, early settlement terms and what insurance each requires. Pick on total cost and exit flexibility, not on the lowest instalment.
Verdict: which option for which buyer
For a used car bought privately, FNB is the only bank of the three that will finance it on Islamic terms, so the calculator question answers itself. For a new or dealer car where certainty matters most, Al Baraka's fixed-rate Murabaha with a 10% deposit, no admin fees and no early settlement penalty is the cleanest contract to model, because the total cost on the quote is the total cost you will pay. For a buyer with no deposit, Absa's 100% financing is the published route, at the price of a higher instalment and a bigger total. For a professional or business owner who wants a fixed rental and a tax deduction on a new or demo premium vehicle over at most 54 months, NBV's rent-to-buy is the outlier worth pricing.
Whichever you choose, the two decisions that move the total cost most are the term and the balloon, not the provider. Keep the term as short as the instalment allows and avoid a residual unless you have a plan to pay it. Compare the FNB and Al Baraka contracts side by side in our Al Baraka versus FNB vehicle finance review, and see every provider on the car financing hub. Facts checked against fnb.co.za, albaraka.co.za, absa.co.za and nbv.co.za on 30 September 2026.
Frequently asked questions
What is the monthly instalment on a R300,000 car with Islamic finance?
At a flat 10.75% annual rate with a 10% deposit and no balloon, the arithmetic gives about R5,105 a month over 72 months, R5,837 over 60 months and R6,946 over 48 months. These are illustrations using FNB's published Islamic Banking Base Rate, not quotes. Your actual rate from FNB, Al Baraka or Absa depends on your credit profile and the vehicle, and only a written quote is binding.
Which Islamic car finance providers publish their rates in South Africa?
Only FNB publishes a reference rate, the Islamic Banking Base Rate of 10.75%, and even that is a benchmark rather than your contract rate. Al Baraka and Absa quote on application; Al Baraka offers an online calculator for its own products. NBV does not use a rate at all, since its rent-to-buy is a fixed rental set when you sign. Compare providers on total cost over the same term rather than on advertised rates.
Do I need a deposit for Islamic vehicle finance?
It depends on the provider. Al Baraka requires a 10% deposit on its Murabaha and its fixed-instalment Ijarah. Absa advertises 100% financing, meaning no deposit is required if you qualify. FNB does not state a minimum deposit on its Islamic Vehicle and Asset Finance page. A larger deposit lowers both the instalment and the total cost, so pay as much as you can without draining your emergency fund.
Is a balloon payment allowed in Islamic car finance?
Yes. Al Baraka allows a residual of up to 30% of the purchase price including VAT on its Murabaha and on its 72-month Ijarah option, and Absa allows a negotiated inflated final payment. A balloon lowers the monthly instalment but increases the total cost because the deferred amount keeps accruing profit for the whole term. NBV's rent-to-buy has no balloon by design.
Can I settle Islamic car finance early without a penalty?
Al Baraka states there are no penalties for early settlement on its vehicle finance and no monthly admin fees. FNB and Absa do not publish their early settlement terms on their Islamic vehicle finance pages, so request them in writing before signing. Under an Ijarah, early exit usually means buying the vehicle from the bank at a stated value, so ask exactly how that value is calculated.
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Can I finance a privately bought used car on Islamic terms?
FNB is the only one of the three banks whose Islamic page states that private vehicle purchases are financed, over 12 to 72 months on an Ijarah. Al Baraka says private sales are not financed on either its Murabaha or Ijarah products, and its fixed Ijarah limits vehicle age to six months. Absa does not address private sales on its page. NBV rents only its own new and demo stock.
