What is the defining difference between Ijarah and interest?

Interest refers to the cost of borrowing money, usually expressed as a percentage of the amount borrowed and paid over a certain period.

Ijara, on the other hand, is a specific type of Islamic finance contract that involves the leasing of the equity of an asset for a specified rental period. The borrower makes regular payments to the lender for the use of the equity component of the asset, until the property is sold or refinanced. Unlike traditional interest-based loans, in Ijara contracts the lender does not earn a profit from the loan itself, but rather from the rent paid for the use of Hejaz’s equity in the property.