SHARIA BANKING

HALAL DEBT CONSOLIDATION OVER-INDEBTEDNESS

ISLAMIC DEBT CONSOLIDATION

Islamic consolidation of debt consists in theory to consolidate all the debts of a borrower that is to say to buy back all the loans to turn them into a single financing and that in accordance with Islamic sharia.

Halal debt consolidation has the theoretical objective of changing conventional loans that a Muslim borrower would have contracted into a single Islamic financing that would become a loan compliant with Islamic Sharia.

The consolidation of Islamic debt does not exist because it would be in contradiction with the fundamental principles of Islamic sharia that prohibit Riba or interests of usury and even less the redemption of such debts.

Debt consolidation by conventional finance is correct if it allows the borrower to reduce its debt and interest rates and make it out of financial precariousness but not through an Islamic loan.