In the present time, banks and companies have intensified their competition over easy installment plans, as they claim, which has burdened many people with debts for no pressing need.

The questioner : The questioner says, O honorable Shaykh! In the present time, banks and companies have intensified their competition over easy installment plans, as they claim, which has burdened many people with debts for no pressing need. Some of these banks do not own the merchandise in question. But they ask you to specify what you need, and then they buy it or procure it on the condition that you open a current account with them and deposit your monthly salary with them to secure their right. What is the ruling and what is the guidance?

The Shaykh : Yes. The guidance is that this is a calamity; I mean that facilitating borrowing is harmful, especially for the youth. You find a young man who is still young, yet he has many debts. Why? Because the path was made easy for him. Debt is a serious matter. .
And the Prophet (peace and blessings be upon him and his family) used to refuse to pray over a deceased person if he had a debt for which there was no repayment, until a man from the Ansar was brought to him. He took a few steps to pray over him, then asked: until he saw it in the faces of the people. Then Abu Qatadah (may Allah be pleased with him) said: . Then it came in a hadith, though it is weak: . So why, my brother, do you burden your conscience with debts when you are in no need of them? You find a man borrowing to buy a car worth seventy thousand, which they call the Shabih or the Kadah, or I don't know what? And he is able to buy a car for thirty thousand. This is wrong, a great error. We ask Allah to guide the youth and others to preserve the purity of their conscience.
As for the transaction mentioned by the questioner, where a man chooses a specific car and goes to the merchant, whether from the bank or not, and says: "I want this specific car, and I have no money." He says: "I will buy it and sell it to you on installments." This is forbidden. It is a stratagem with no doubt in it. It is a close stratagem. If the great riba for which Allah has prescribed a punishment not prescribed for any other sin except shirk were to be made lawful by this method and this deception, then riba would never have been forbidden. And if the Prophet (peace and blessings be upon him and his family) said: . If you considered this stratagem about which the Prophet (peace and blessings be upon him and his family) said: you would find it further from being forbidden than this stratagem mentioned by the questioner. Do not be deceived, O Muslim, by one who issues a ruling of permissibility, because as soon as a person reflects on it, he knows that it is forbidden. Then their claim: that if the one who requested to buy it had made it easy after the bank or merchant bought it, they would have accepted it from him. We say: This is empty talk, it has no meaning. A man came and specified the car he wanted; he is not making it easy. But suppose he were making it easy, "bring it to me so they can throw in the straw so that it is not said: this is a stratagem to circumvent riba." But Allah the Exalted is not unaware of any hidden thing. Beware, my Muslim brother, of this transaction. It is a greater sin than if the bank said: "Take fifty thousand, buy the car, and it is on you for sixty thousand in installments." This is forbidden with no doubt. And the form mentioned by the questioner is more evil, because it combines the harm of riba and the harm of what? The stratagem and the deception. Yes.