The ruling on installment loans that carry interest? And an expanded discussion on the prohibition of legal stratagems, with an explanation of the hadith: (Whoever sells two sales in one sale)?

Al-Hawini: I went with one of the brothers to a car exhibition, and I chose a car worth eight thousand riyals, on the condition that he would give me one thousand and two hundred riyals each month, and there would be an increase of five thousand on it; that is, it would amount to thirteen thousand riyals on him, and four thousand has reached me from it; is there anything forbidden in this or not?

The Shaykh : What did he take in return for the increase?
Al-Hawini: It seems the return was that I gave him the amount.

The Shaykh : The case is an open usurious matter, it does not need a question; because this is a “loan that led to a benefit.”
Al-Hawini: But he might say, I mean, the car is between me and him, it is not money for money, but money and its income is a car in half?

The Shaykh : “Double,” a stratagem, many people fall into this today.
Al-Hawini: Installment payments, meaning it seems he intends by it installment payments.

The Shaykh : It is not permissible, he (peace and blessings be upon him) said: , and the Wise Lawgiver has forbidden legal stratagems, and , the hadith that came in “Sahih” from his saying (peace and blessings be upon him): , the point of this hadith is that Allah (Mighty and Majestic), when He forbade the Jews as He said in the Noble Qur’an: , among these good things that were forbidden to the Jews were the fats, so it was obligatory for them when they slaughtered the animal to benefit from its meat, and to throw its fat to the ground, so the Jews did not have patience with this just divine ruling, so what did they do?
They took the fats and threw them into the pots, then they lit the fire underneath them, so they took another form, and by that Satan made their evil deeds attractive to them, and deluded them that this fat had become something other than the forbidden fat, so they took the fat and rendered it (i.e., melted it) and sold it and ate its price.
The point is that Allah (Mighty and Majestic) disciplined us with such as the hadith of His Prophet and its like, that it is not permissible for a Muslim to stratagem to make lawful what Allah (Mighty and Majestic) has forbidden by the slightest of stratagems. And the marriage of tahil (dissolution) which – known to those present, if Allah wills – is a marriage in which the conditions of the prescribed marriage are usually met, but why did the Wise Lawgiver make it an invalid marriage and curse the one who dissolves and the one for whom it is dissolved?
Because it was not intended for what is usually intended from the lawful marriage which our Lord (Mighty and Majestic) referred to in His saying (Blessed and Exalted is He): , since the intention of the marriage of tahil was not to achieve this tranquility and affection between the spouses, but rather the intention was to make lawful what Allah forbade in His saying: , and this is a discipline from Allah (Mighty and Majestic) for the one who divorces his wife with the third divorce, so that people do not become accustomed to divorcing and then regretting their divorce, so this one who dissolves hastens the return of the woman to her husband who divorced her three times, and Allah (Mighty and Majestic) says: , marry a lawful marriage as you did before, so when this one who dissolves intends to make lawful what Allah forbade, he was cursed in the well-known hadith of the Messenger (peace be upon him): .
And now we return to the previous picture, or to the sale of installments, if I came to a rich person named Zayd and said to him, lend me a thousand pounds, I want to buy a car, lend me a thousand pounds for the sake of Allah, he says, I will do it but on the condition that you give me a thousand and one hundred – for example –, this is forbidden by the consensus of the scholars of the Muslims; because it is open usury, and a loan that led to a benefit.
Now we introduce the intermediary; I want to buy a car, so he says to me, go you and buy the car, and I will pay for you, and this costs – for example – ten thousand, you pay ten thousand and one hundred; what is the difference between this picture and the first picture? There is no difference at all except that the car entered as an intermediary to make lawful what Allah forbade, and the result is one, and that if he gave me the value of the car and took usury from me; then this is open usury, but he is not willing to give me the car, he says, go take the car, then he takes from me the value of the car, and the usury on it “all roads lead to the mill”; therefore he (peace be upon him) said: , so I know that some scholars, old and new, interpret this hadith with an interpretation by which they exclude the sale of installments, and they have many interpretations in that, but I, from my methodology and my upbringing, first, that I interpret the hadiths with each other, and second, I return to the Salaf in interpreting them, and especially among them those who were narrators of some of them, and Imam Ahmad narrated in his “Musnad” with a strong chain from Simak ibn Harb – and he is from the Tabi’un –, he narrated from Ibn Mas’ud (may Allah be pleased with him) who said: “The Messenger of Allah (peace and blessings be upon him) forbade two sales in one sale,” and in another wording: “two transactions in one transaction,” so a man said to Simak, the narrator of the hadith: “What are two sales in one sale?” He said: That you say: “I sell you this for cash for such and such, and for deferred payment for such and such.” This is the sale of installments, the narrator of the hadith, Simak ibn Harb, interprets with it the hadith: “The Messenger of Allah (peace and blessings be upon him) forbade two sales in one sale,” he said: That you say: “I sell you this for such and such dinars – for example – for cash, and for such and such dinars and dirhams for deferred payment.” What is this dirham in return for? In return for the deferred payment, so there is no difference between the increase that is called an increase in return for the term in the sale or in the loan, the sale here is an intermediary to make lawful what Allah forbade on the tongue of His Prophet (peace and blessings be upon him), and those who go to the permissibility of the sale of installments – and they know such hadiths – interpret them by saying that the prohibition of two sales in one sale is only due to the ignorance of the price, because the seller offers two prices; the cash price, and the deferred price, so when the buyer separates from the seller with one of the prices, they say – and I am not with them naturally – because he separated and it was not specified which of the prices he relied on between them.
I say: Such an interpretation, first, contradicts the reasoning mentioned in the first hadith. This is because the reasoning I quoted earlier from some of them is based on the ignorance of the price, and this ignorance conflicts with the Shari'ah cause. When the matter of reasoning a Shari'ah ruling revolves between a rational cause and a Shari'ah cause, there is no doubt that the Shari'ah cause is the one that must be relied upon, not the rational cause. What is the Shari'ah cause? It was mentioned earlier in his saying (peace be upon him): , he prohibited two sales in one sale. This aligns with this part of this hadith: This is the hadith of Abu Hurayrah. The hadith of Ibn Mas'ud: , so one is a corroborating narration for the other. However, in each of the two hadiths there is a benefit not found in the other. As for the hadith of Abu Hurayrah, it is the transmitted cause; where he (peace be upon him) said in the completion of the hadith: , or the lesser of the two: the one with the lower price, as is clear. Otherwise, if he took the greater of the two, he has taken riba, .
This hadith gives us another benefit besides the cause explicitly stated in it, which is that it is a cause related to riba. As for the other benefit, it is that the sale is valid, and the increase is invalid. The sale is valid, and the increase is invalid. As for those who interpret the hadith of Ibn Mas'ud, "He prohibited two sales in one sale," as being due to the ignorance of the price; they first, as we mentioned earlier, reason with a cause that contradicts the cause explicitly stated in the hadith of Abu Hurayrah. Second, they invalidate the sale, whereas the hadith of Abu Hurayrah validates it and does not invalidate it, but it invalidates the increase. Then, supporting the hadith of Abu Hurayrah, comes a narration from Ibn Mas'ud—this narration is mawquf (stopping at him)—where he said: "A transaction in two transactions is riba." So, we take the explicitly stated cause; at the very least, we prefer it and support it over the cause for which no text has come, first, and then it contradicts the explicitly stated cause, second, and finally, it is a cause that does not occur in people's dealings, especially today.
If we come to the one who bought a car on an installment basis; where is the ignorance of the price? After the back and forth and the increase over the cash price to a final installment price, and the merchant finalized it and wrote it in his special account book and wrote what they call "bills of exchange" and so on. How can it be said that they separated on an unknown price? Is it the cash price or the deferred price? This, in reality, does not match the reality of installment sales today at all. In fact, I say: nor in the old times, before the existence of bills and bills of exchange and the like; as evidenced by:
If a man comes wanting to buy a camel or a sheep or the like for two prices, they will separate on one of the two sales. Then, if he paid the price in cash, the price is determined and the issue is resolved. And if they parted without him paying the price, it is self-evident that they parted on the installment price (the deferred price). So where is the ignorance of the price? That is completely absent.
Finally—and the research in this is long and very long—I want to draw attention to the fact that this transaction, namely installment sales, is foreign to Islam, foreign to Islamic transactions. It is a foreign, Western transaction from peoples whom Allah (Blessed and Exalted is He) described in the Noble Qur'an as: . These people do not prohibit or permit. And because of our blind imitation of these disbelievers, we preferred and found easy installment sales. Indeed, in it there is the fulfillment of people's interests, but it is not from the rejected principle in Islam, their saying: "The end justifies the means."
So, what I want to remind you of is that installment sales have removed mercy and compassion from the hearts of the rich toward the poor. It was possible for all merchants to earn great wages and reward while earning lawful money, especially since this lawful earning—with the great wages and reward from Allah—is more beneficial for them in the immediate future, let alone the hereafter. How so? It has come in some authentic hadiths from the Prophet (peace and blessings be upon him): , a loan of two hundred dinars is equal to a charity of one hundred dinars. If you lend your Muslim brother two hundred dinars, it is as if you gave charity of one hundred dinars. So, if the merchants whom Allah has expanded in wealth sold at the cash price in installments and did not take an increase over the cash sale, and were patient in fulfilling their obligations to their Muslim brothers for the sake of Allah (Mighty and Majestic), not for the sake of the increase which the Messenger explicitly named riba, but to draw near to Allah (Blessed and Exalted is He); then consider how much charity is available to them every day without them giving charity? Just by selling at the cash price in installments; they will collect thousands of charities every day, and they have not given charity. This is from the aspect of the hereafter. As for the immediate future, look now with me at this divine secret: He only wants that the Muslim not profit from his Muslim brother by exploiting his need more than the seller benefits from the rich. If you imagine with me two merchants selling the same goods, one sells at one price with no difference for him between the cash price and the installment price, and the other takes an increase on the installment sale; which of the two men will sell his goods more?
The first: The first.

The Shaykh : Tell me with knowledge, two merchants, each selling the same goods, and their prices in installments are the same, but one, when selling on installments, sells at the same cash price, while the other takes an increase. Do the customers increase with the first or the second?

The questioner : And: With the first.

The Shaykh : With the first. So why don't people sell at one price, where the installment price is the same as the cash price? That is greed and avarice, first, and then the desire to avoid the reward of the hereafter which we mentioned earlier. If he, for example, wanted to sell at the installment price with an increase of one thousand riyals, for example, and did not take this increase from him, what would be written for him? A charity of five hundred riyals. I wrote it for him like this; because he sold to him and was patient with him in fulfilling the obligation. So the reward that the merchant earns if he sells at one price and does not take the increase is better for him in the immediate future and the hereafter.
But first, greed and avarice, and second, our imitation of the Europeans whom the Lord of the Worlds described, as we mentioned earlier, in the Noble Qur'an: . And because of this bad transaction that has crept in among merchants today, it was one of the causes that weakened the trust and bond that existed in past times between the rich and the poor. And such control is what generates explosions and generates communist parties and the like, which overthrew the rich so that they would finally return as great and small poor. That is a cause for those who do not stand by what Allah (Mighty and Majestic) commanded of justice and excellence, and the good dealing of Muslims with one another. And perhaps this amount is sufficient, and praise be to Allah, the Lord of the Worlds.
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The Shaykh : Straighten your rows, for straightening the rows is part of the perfection of the prayer. Line up, do not leave gaps for Satan. Move forward there at the back, do not extend your heads, look to the right and left as you are, until you see the one behind the imam. Move forward, the preacher, those to your left should move forward, ... dervishes ... Oh Allah.
[ImamahThe Shaykh : of the prayer].
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The Shaykh: Is that it? Please go ahead.

The questioner: His EminenceThe Shaykh : Before reading the questions, we would like to complete the last issue... .

The Shaykh : Which one?

The questioner : .

The Shaykh: Go ahead.

The questioner: The sale is a binding contract, and if one says, "I buy this for such-and-such in cash or for such-and-such on credit," the sale will be binding in one sale. But if we apply the hadith to the sale of 'inah, for example, "I buy for such-and-such on credit and sell for cash," and "I sell for cash and buy on credit," here there are two binding sales in one sale. So, does he take the lesser of the two or the riba?

The Shaykh: Who interpreted it this way?

The questioner : The one who interpreted it with your interpretation, may you be respected.The Shaykh ... .

The Shaykh : Who interpreted it in this way? I mean, who attributed the hadith to the sale of 'inah?

The questioner : Do you mean you are asking which of the scholars?

The Shaykh : I have also mentioned to you which of the scholars interpreted it in the way you just heard from me. Our interpretation is that of the Salaf, and your interpretation is that of the Khalaf. This is sufficient for us, as it is said:
"This difference between us is enough *** And every vessel emits what is in it"
But I know that you are a Salafi like me; are you not?

The questioner : I hope so.

The Shaykh : And I hope so with you. So why do we leave aside the interpretation of the Salaf and the narrator who narrates the hadith directly? Why do we leave it?
This is in addition to everything we have mentioned regarding the fact that installment sales involve exploiting the need of the poor and the incapable who cannot pay the price in cash. It also accustoms merchants to material greed and turning away from the hereafter's reward. This is a very significant difference between this interpretation and that one. I recall that among the wisdoms narrated in some of the divine books—and the chain of narration is not important to us here, because we are speaking about wisdom—it was said: "Jesus (peace be upon him) once admonished the disciples and told them that prophets would come after him, and that a Messenger named 'Ahmad' would come after them, who would be the last of the messengers to be sent. They asked him: How will we know the truthful from the liar? He answered—and here is the wisdom: 'You will know them by their fruits.' So we distinguish one statement from another based on the result and the outcome. If it is said that installment sales are permissible and taking an increase in exchange for this patience in fulfilling the payment, it contains what we have pointed out regarding accustoming merchants to greed and avarice, and exploiting the needs of the weak who cannot pay the price of their need except with a price. It also contains, as we mentioned previously, that the merchant, who usually does not devote himself to worshipping Allah and remembering Him as do the non-merchants who are free to devote themselves to the remembrance and worship of Allah. So Allah (Mighty and Majestic) has created for these merchants this opportunity to earn rewards, as they say in some Syrian countries: 'Like a saw going up and down.' So he sits without mentioning Allah, sending blessings upon his Prophet, or reciting the Qur'an; because he is not free to do so, but is occupied with buying and selling. There is nothing wrong with that; because it is permissible. But He has opened for him the way to earn good deeds that those who are free for worship, the poor and the needy, cannot attain. And that is by being patient in fulfilling the payment for those who buy goods from him, so that a charity of one dirham is recorded for him for every two dirhams. And so you may calculate.
So the fruit of this statement is more beneficial for the Muslim community than to invalidate the indication of this hadith that the intended meaning of two sales in one sale is: I say this for such-and-such in cash, and this for such-and-such on credit. I say this, whereas you, following those I mentioned earlier, attribute it to the sale of 'inah. And regarding the sale of 'inah, it is sufficient for us to know the prohibition of it in his (peace be upon him) saying: .
In summary: I do not want to oppose you to what I am warning you against. I do not want to argue with you, just as I do not want you to argue with me. I have mentioned what I have of inferior goods. So if it pleased someone, praise be to Allah. And if not, let him look for goods that are better for him than those.