Fatwa No. ( 2805 ): Q: The content is that a questioner from the United States is asking about one who sells cars on installments, with a fixed interest rate on the deferred amount, but the interest increases if the installment payment is delayed past its due date. Is this transaction permissible or not? A: If the one selling the car for a deferred period sells it for a known price due at a known time or times, in terms of duration and installments, and the deferred amount does not increase in the price of the car by being delayed, then there is nothing wrong with that; because of the saying of the Exalted and Majestic: يَا أَيُّهَا الَّذِينَ آمَنُوا إِذَا تَدَايَنْتُمْ بِدَيْنٍ إِلَى أَجَلٍ مُسَمًّى فَاكْتُبُوهُ O you who have believed, when you contract a debt for a specified term, write it down. [Al-Baqarah 2:282] the verse, and because it is established that the Messenger of Allah (peace and blessings be upon him) bought on a deferred basis. However, if the deferred amount—as is understood from the question—increases when the installment payment is delayed past its specified date, then that is not permissible by the consensus of the Muslims; because the riba of the pre-Islamic age of ignorance applies to it, which is what the Qur'an was revealed regarding, namely the statement of one of them to the one who has a debt with him when that debt comes due: "Either you pay it off, or you increase it," meaning: you increase the amount.

Sale on Installment

The Permanent Committee for Scholarly Research and Ifta

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Fatwa No. ( 2805 ):
Q: The content is that a questioner from the United States is asking about one who sells cars on installments, with a fixed interest rate on the deferred amount, but the interest increases if the installment payment is delayed past its due date. Is this transaction permissible or not?
A: If the one selling the car for a deferred period sells it for a known price due at a known time or times, in terms of duration and installments, and the deferred amount does not increase in the price of the car
by being delayed, then there is nothing wrong with that; because of the saying of the Exalted and Majestic:

O you who have believed, when you contract a debt for a specified term, write it down.

يَا أَيُّهَا الَّذِينَ آمَنُوا إِذَا تَدَايَنْتُمْ بِدَيْنٍ إِلَى أَجَلٍ مُسَمًّى فَاكْتُبُوهُ

[Al-Baqarah 2:282]

the verse, and because it is established that the Messenger of Allah (peace and blessings be upon him) bought on a deferred basis. However, if the deferred amount—as is understood from the question—increases when the installment payment is delayed past its specified date, then that is not permissible by the consensus of the Muslims; because the riba of the pre-Islamic age of ignorance applies to it, which is what the Qur'an was revealed regarding, namely the statement of one of them to the one who has a debt with him when that debt comes due: "Either you pay it off, or you increase it," meaning: you increase the amount.

Source www.alifta.gov.sa

The Arabic text is copied verbatim from the original source, without any edits.

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