for end user, should be same except islamic loan has ceiling interest rate (which i think very unlikely to reach). also paperwork 10% more expensive, but there was rebate previously. now dunno.

Contract Tak sama.

Conventional contract is non shariah compliance. In Islamic facilities, the bank purchased property and sell it back to the agent (purchaser) (Wakalah. Aka agency contract) and there is a ceiling profit rate imposed. Our old time local Islamic contracts are mostly profit sharing contracts using Bai’ Bithamin Ajil (BBA) methodology where sale and purchase with profit is offered to purchaser of property.

Modern contracts are mostly using Musharakah Mutanaqisah (MM) methodology. Both bank and the purchaser enter into a financing agreement with the bank and purchaser Co-providing capital to buy the property and the bank lease it back to the purchaser whereas purchaser promises to buy the property back from bank at a later stage.

Ok. In short. No interest is charged in Islamic financing, hence there are a few pros and cons

1) pro: Islamic financing offer no lock in and no early settlement penalty
2) cons: facilities agreement fee (bank documentation fee) is higher cos a few more documents are required
3) pro: ceiling rate reduces uncertainties (bank is unlikely to reach 10.x rate in short period of time )
4) cons: since no interest is chargeable, late payments etc will result in fixed charges, which is usually higher