What is the ruling on installment sales and deferred payment sales? And what is the difference between them?
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The questioner : I mentioned a quick answer, but the difference between deferred payment sales and installment sales was not clear to me. I stated that the former is permissible and the latter is forbidden.
The Shaykh : How?
The questioner : You mentioned to me the difference between deferred payment sales and installment sales, that the former is permissible.
The Shaykh : There is no difference.
The questioner : Is there no difference between the deferred payment?
The Shaykh : No, no, it is not permissible.
The questioner : Both are not permissible, the deferred payment and the installment?
The Shaykh : Because a deferred payment sale is an installment sale.
The questioner : It may be.
The Shaykh : But it may be a deferred sale such that whenever the delay increases, the riba (usury or interest) increases, so this contains a deferred payment.
The questioner : But are the customary forms of installment sales now permissible?
The Shaykh : No.
The questioner : Not permissible.
The Shaykh : How?
The questioner : You mentioned to me the difference between deferred payment sales and installment sales, that the former is permissible.
The Shaykh : There is no difference.
The questioner : Is there no difference between the deferred payment?
The Shaykh : No, no, it is not permissible.
The questioner : Both are not permissible, the deferred payment and the installment?
The Shaykh : Because a deferred payment sale is an installment sale.
The questioner : It may be.
The Shaykh : But it may be a deferred sale such that whenever the delay increases, the riba (usury or interest) increases, so this contains a deferred payment.
The questioner : But are the customary forms of installment sales now permissible?
The Shaykh : No.
The questioner : Not permissible.