Is installment sale permissible, since the merchant says that the price of this item is one hundred dinars if paid in cash, or one hundred and fifty dinars in installments?
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The questioner : Is installment sale permissible, since the merchant says that the price of this item is one hundred dinars if the amount is paid in cash, and one hundred and fifty dinars in installments over a certain number of months? What is the ruling on that? May you be rewarded.
The Shaykh : That is permissible and there is no harm in it, because it falls under the general meaning of the statement of Allah the Exalted:[Al-Baqarah 2:275] and His statement: [Al-Baqarah 2:282] This buyer was presented with the item at two prices: the cash price and the deferred price. Let us assume that the cash price is one hundred and the deferred price is one hundred and fifty, and he took the deferred option in the same session and left with the item.
The questioner : Yes.
The Shaykh : So, one hundred and fifty became established in his liability, specifically defined and designated. This is a sale with no harm in it, because the buyer was given the choice between this or that. This is not of usury in any way, because usury is selling dirhams for dirhams, not selling an item whose cash price is such-and-such and whose deferred price is such-and-such. This is not of the two sales in one sale, because this is one sale, but the person was given the choice between two sales and he chose one of them.
The most correct statement regarding the meaning of the two sales in one sale is that a person sells something for a deferred price, then buys it back from the one who bought it from him for a lower cash price. An example of this is that he sells him a house for one hundred thousand over a period of one year, then the seller returns and buys the house from the one who bought it from him for eighty thousand in cash. This is the forbidden matter, which is two sales in one sale, because the reality of the matter is that the item sold is one, and two transactions have been made upon it, and the intention is to circumvent, either directly or indirectly, the delivery of eighty thousand and the receipt of one hundred thousand in exchange for it. This is a ruse for usury without a doubt. However, in the issue of installment sales, an important matter must be noted: it is necessary that the item be in the possession of the seller, and that he owns it, before he agrees with the buyer. If it is not with him, meaning he does not own it, then the Prophet (peace and blessings be upon him) said:Sunan Ibn Majah 2187Hasan (Darussalam) Yes.
The questioner : May Allah bless you, O honorable Shaykh. He has another question, O honorable Shaykh. He says:
The Shaykh : That is permissible and there is no harm in it, because it falls under the general meaning of the statement of Allah the Exalted:
But Allah has permitted trade
وَأَحَلَّ اللَّهُ الْبَيْعَO you who have believed, when you contract a debt for a specified term, write it down.
يَا أَيُّهَا الَّذِينَ ءامَنُوا إِذَا تَدَايَنتُمْ بِدَيْنٍ إِلَى أَجَلٍ مُسَمًّى فَاكْتُبُوهُThe questioner : Yes.
The Shaykh : So, one hundred and fifty became established in his liability, specifically defined and designated. This is a sale with no harm in it, because the buyer was given the choice between this or that. This is not of usury in any way, because usury is selling dirhams for dirhams, not selling an item whose cash price is such-and-such and whose deferred price is such-and-such. This is not of the two sales in one sale, because this is one sale, but the person was given the choice between two sales and he chose one of them.
The most correct statement regarding the meaning of the two sales in one sale is that a person sells something for a deferred price, then buys it back from the one who bought it from him for a lower cash price. An example of this is that he sells him a house for one hundred thousand over a period of one year, then the seller returns and buys the house from the one who bought it from him for eighty thousand in cash. This is the forbidden matter, which is two sales in one sale, because the reality of the matter is that the item sold is one, and two transactions have been made upon it, and the intention is to circumvent, either directly or indirectly, the delivery of eighty thousand and the receipt of one hundred thousand in exchange for it. This is a ruse for usury without a doubt. However, in the issue of installment sales, an important matter must be noted: it is necessary that the item be in the possession of the seller, and that he owns it, before he agrees with the buyer. If it is not with him, meaning he does not own it, then the Prophet (peace and blessings be upon him) said:
Do not sell what is not with you.
لا تبع ما ليس عندكThe questioner : May Allah bless you, O honorable Shaykh. He has another question, O honorable Shaykh. He says: