Forms of the Forbidden Installment Sale
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The installment sales currently prevalent among people are forbidden. Is there any guidance on how to make them permissible, if dealing in installments is religiously lawful?
The Lawful Installment Sale: That someone comes to the one who has the goods,And he says: and says, "Sell me this item, which is worth one hundred now, for one hundred and fifty, deferred for one or two years, for example." There is nothing wrong with this; because the Companions (may Allah be pleased with them) used to make forward sales in fruits for one or two years, and the Prophet (peace and blessings be upon him) permitted that for them.As for using stratagems: The merchant buys the item, though he never wants it, but only wants the riba (usury or interest) in it. It is not permissible to use stratagems to circumvent the prohibitions of Allah.And on this basis, we say to the brother in need: You go yourself to the owner of the showroom,And tell him: and say, "Sell me the car, which you are selling now for fifty, for sixty, deferred for one year. Take the registration and pledge the car if you fear that I might tamper with it."
The Lawful Installment Sale: That someone comes to the one who has the goods,And he says: and says, "Sell me this item, which is worth one hundred now, for one hundred and fifty, deferred for one or two years, for example." There is nothing wrong with this; because the Companions (may Allah be pleased with them) used to make forward sales in fruits for one or two years, and the Prophet (peace and blessings be upon him) permitted that for them.As for using stratagems: The merchant buys the item, though he never wants it, but only wants the riba (usury or interest) in it. It is not permissible to use stratagems to circumvent the prohibitions of Allah.And on this basis, we say to the brother in need: You go yourself to the owner of the showroom,And tell him: and say, "Sell me the car, which you are selling now for fifty, for sixty, deferred for one year. Take the registration and pledge the car if you fear that I might tamper with it."