Those who lend to people through the following methods: The borrower asks, "What item do you want?" and he says, "A car of such and such a model, and the price is close to such and such."
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The questioner : Those who lend to people through the following methods: The borrower asks, "What item do you want?" and he says, "A car of such and such a model, and the price is close to such and such." Then the lender goes and buys this described item, then sells it to the borrower on installments. What is the ruling on such a matter?
The Shaykh : The ruling is prohibition, meaning that this action is forbidden because it is a clear stratagem. Instead of the lender saying to the borrower, "Take these fifty thousand, buy the car you want, and it is due from you in one year for sixty thousand," he says, "Go and choose the car you want, and I will buy it for you in cash between me and the seller, and I will sell it to you on installments with an increase over the price." This is a clear stratagem, very close to the first form, and it is more wicked than the first form, meaning more wicked than giving him fifty thousand and saying it is for sixty thousand in one year, because that form is explicit riba (usury or interest), and the person does it while afraid and ashamed of Allah (Mighty and Majestic), and perhaps Allah will grant him repentance. As for the form where he says, "Go and choose the car, and I will buy it and sell it to you on credit for a higher price," he believes it is lawful and hardly gives it up, and it combines the harm of riba (usury or interest) and the harm of deception.
And if the Children of Israel were punished for a stratagem lower than this, without a doubt, what can be said about this stratagem? Allah forbade the Children of Israel the fats, so what did they do? They said: "We will melt the fats, then sell them and take the price, and at that time we will not have eaten the fats." In this stratagem, there are two degrees: melting and selling, and taking the price is a substitute for eating. And in the stratagem mentioned in the question, there is one stratagem. The Prophet (peace and blessings be upon him) warned this Ummah from imitating the Jews, and he said (peace and blessings be upon him and his family): So my advice to my Muslim brothers who want their food to be lawful, their drink to be lawful, and their sustenance to be lawful is to repent to Allah (Mighty and Majestic) from these stratagems [At-Talaq 65:2-3] [At-Talaq 65:4] . Yes.
The Shaykh : The ruling is prohibition, meaning that this action is forbidden because it is a clear stratagem. Instead of the lender saying to the borrower, "Take these fifty thousand, buy the car you want, and it is due from you in one year for sixty thousand," he says, "Go and choose the car you want, and I will buy it for you in cash between me and the seller, and I will sell it to you on installments with an increase over the price." This is a clear stratagem, very close to the first form, and it is more wicked than the first form, meaning more wicked than giving him fifty thousand and saying it is for sixty thousand in one year, because that form is explicit riba (usury or interest), and the person does it while afraid and ashamed of Allah (Mighty and Majestic), and perhaps Allah will grant him repentance. As for the form where he says, "Go and choose the car, and I will buy it and sell it to you on credit for a higher price," he believes it is lawful and hardly gives it up, and it combines the harm of riba (usury or interest) and the harm of deception.
And if the Children of Israel were punished for a stratagem lower than this, without a doubt, what can be said about this stratagem? Allah forbade the Children of Israel the fats, so what did they do? They said: "We will melt the fats, then sell them and take the price, and at that time we will not have eaten the fats." In this stratagem, there are two degrees: melting and selling, and taking the price is a substitute for eating. And in the stratagem mentioned in the question, there is one stratagem. The Prophet (peace and blessings be upon him) warned this Ummah from imitating the Jews, and he said (peace and blessings be upon him and his family):