Ruling on installment sales and the reduction of deferred amounts
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Your Eminence! Selling on installment or on credit, where the buyer owns—for example—a car! This is the first matter.
The second matter: If the buyer wants to pay the remaining value after a year or after a period, is he charged for this period?
Meaning he is asking about two questions: The first question: Is it permissible to sell a commodity for a deferred price in installments, with a portion of the price becoming due each year? This is permissible and there is no harm in it,Due to the general statement of Allah the Exalted: [al-Baqarah: 282] but the commodity must be in the possession of the seller.
And secondly: The buyer must have intended the commodity itself to benefit from it, whether deferred or not. However, if he intended the commodity and bought it to sell it and take its price to benefit from it, this is a matter called by the scholars the issue of tawarruq, and there is disagreement among the scholars regarding its permissibility: Shaykh al-Islam Ibn Taymiyyah and a group of scholars say: This is forbidden; because it is a stratagem to sell dirhams for dirhams by introducing this commodity.
And some of them said: It is permissible on the condition that there is a need and he cannot find anyone to lend to him.
And the second matter in the question: If the one who bought it for a deferred price, with a certain amount due each year, wants to pay the price in cash in the first year, for example, is a discount given to him in the price in exchange for paying early, or not?We say: This is also a matter of disagreement among the scholars: Some scholars say: It is not valid to reduce anything from the deferred amount; because it is exchanging part of his wealth for part of it.
And the correct view is: It is permissible,Meaning: It is permissible for one who has a deferred debt to agree with the owner of the debt to pay it in full with a reduction corresponding to the remaining period.
The second matter: If the buyer wants to pay the remaining value after a year or after a period, is he charged for this period?
Meaning he is asking about two questions: The first question: Is it permissible to sell a commodity for a deferred price in installments, with a portion of the price becoming due each year? This is permissible and there is no harm in it,Due to the general statement of Allah the Exalted:
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 مُسَمّىً فَاكْتُبُوهُAnd secondly: The buyer must have intended the commodity itself to benefit from it, whether deferred or not. However, if he intended the commodity and bought it to sell it and take its price to benefit from it, this is a matter called by the scholars the issue of tawarruq, and there is disagreement among the scholars regarding its permissibility: Shaykh al-Islam Ibn Taymiyyah and a group of scholars say: This is forbidden; because it is a stratagem to sell dirhams for dirhams by introducing this commodity.
And some of them said: It is permissible on the condition that there is a need and he cannot find anyone to lend to him.
And the second matter in the question: If the one who bought it for a deferred price, with a certain amount due each year, wants to pay the price in cash in the first year, for example, is a discount given to him in the price in exchange for paying early, or not?We say: This is also a matter of disagreement among the scholars: Some scholars say: It is not valid to reduce anything from the deferred amount; because it is exchanging part of his wealth for part of it.
And the correct view is: It is permissible,Meaning: It is permissible for one who has a deferred debt to agree with the owner of the debt to pay it in full with a reduction corresponding to the remaining period.