The five differences that matter.
Interest
Charged on principal
No interest. Returns come from rent (Ijara), profit-sharing (Musharakah), or transparent markup (Murabaha).
Risk sharing
Lender bears no asset risk
Financier shares the asset or venture risk. That is the structural condition for return.
Late fees
Often retained as profit
Capped, transparent, and (per Mufti review) typically donated or cost-recovery only.
Default treatment
Full deficiency pursued
Often limited recourse; varies per contract. Mufti review verifies the recourse policy.
Ownership
Lender holds a lien on collateral
Genuine partial ownership (Musharakah) or financier ownership with lease (Ijara).