The Ruling on Personal Financing through Tawarruq

Question:
This questioner, Abdullah, says: Shaykh, I want to obtain personal financing from one of the banks by purchasing a car from this bank, then selling it, and then dividing the amount between my brother and me, with the installment payments being shared equally between my brother and me. Is this permissible?

Answer:
This is permissible with conditions. The first condition is that the commodity must be in the possession of the seller, whether the bank or someone else; it must be in their ownership, and then you purchase it from them. This is the first condition. The second condition is that if you purchase it from them, you must take possession of it, and taking possession means transferring it from the seller’s location to another location.
The third condition is that you do not sell it to the creditor, but rather to someone else. This is what is called the issue of tawarruq. If you obtain this money through valid tawarruq, there is no harm in lending some of it to your brother. You lend it to him as a good loan without taking any increase from him. Yes.