What is the difference between a debt, a loan, and a forward sale?
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The questioner : May the mercy and blessings of Allah be upon you.
The Shaykh : And upon you be peace, and Allah's mercy and blessings.
The questioner : What is the difference between a debt, a loan, and a forward sale?
The Shaykh : A debt, a loan, and a forward sale all mean the same thing according to the jurists, because the jurists (may Allah have mercy on them) hold that a debt is whatever is established in the liability, whether it is a loan, the price of a sale, a rent that the lessee has not paid, or something else. Everything that is established in the liability is a debt according to the scholars.
As for the common people, a debt in their understanding is tawarruq: that is, selling a commodity for a deferred price that is higher than its spot price, so that the buyer can sell it and benefit from its price. This is what a debt is according to the common people. However, in the Shari'ah and according to the scholars, a debt is everything established in the liability, whether it is the price of a sale, a loan, a forward sale, or something else.
The Shaykh : And upon you be peace, and Allah's mercy and blessings.
The questioner : What is the difference between a debt, a loan, and a forward sale?
The Shaykh : A debt, a loan, and a forward sale all mean the same thing according to the jurists, because the jurists (may Allah have mercy on them) hold that a debt is whatever is established in the liability, whether it is a loan, the price of a sale, a rent that the lessee has not paid, or something else. Everything that is established in the liability is a debt according to the scholars.
As for the common people, a debt in their understanding is tawarruq: that is, selling a commodity for a deferred price that is higher than its spot price, so that the buyer can sell it and benefit from its price. This is what a debt is according to the common people. However, in the Shari'ah and according to the scholars, a debt is everything established in the liability, whether it is the price of a sale, a loan, a forward sale, or something else.