What is the Shari'ah-compliant installment plan?
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The questioner : May Allah reward you: Now that we have understood that installment payments, which are exchanged between people, are forbidden.
The Shaykh : How?
The questioner : The installment payments currently prevalent among people.
The Shaykh : Yes, yes.
The questioner : That they are forbidden. Well, is there any guidance?
The Shaykh : Is it?
The questioner : Is there any guidance regarding its solution?
The Shaykh : Regarding its solution.
The questioner : No, if the transaction with installment payments is Shari'ah-compliant?
The Shaykh : Yes.
The questioner : The transaction with installment payments being Shari'ah-compliant.
The Shaykh : Yes, the permissible installment plan is when one comes to the person who has the goods and says: "Sell me this item that is currently worth one hundred 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 advance payment for fruits for one or two years, and the Prophet (peace and blessings be upon him) permitted them to do so.
As for using a stratagem to buy the goods when the merchant does not want them at all, but only wants the riba (usury or interest) in them, it is not permissible to use stratagems to circumvent the prohibitions of Allah. Yes, and based on this, we say to the brother in need: Go yourself to the owner of the showroom and say to him: "Sell me the car that you are selling now for fifty for sixty, deferred for one year, and take the registration and pledge the car if you are afraid that I might tamper with it." Yes.
The Shaykh : How?
The questioner : The installment payments currently prevalent among people.
The Shaykh : Yes, yes.
The questioner : That they are forbidden. Well, is there any guidance?
The Shaykh : Is it?
The questioner : Is there any guidance regarding its solution?
The Shaykh : Regarding its solution.
The questioner : No, if the transaction with installment payments is Shari'ah-compliant?
The Shaykh : Yes.
The questioner : The transaction with installment payments being Shari'ah-compliant.
The Shaykh : Yes, the permissible installment plan is when one comes to the person who has the goods and says: "Sell me this item that is currently worth one hundred 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 advance payment for fruits for one or two years, and the Prophet (peace and blessings be upon him) permitted them to do so.
As for using a stratagem to buy the goods when the merchant does not want them at all, but only wants the riba (usury or interest) in them, it is not permissible to use stratagems to circumvent the prohibitions of Allah. Yes, and based on this, we say to the brother in need: Go yourself to the owner of the showroom and say to him: "Sell me the car that you are selling now for fifty for sixty, deferred for one year, and take the registration and pledge the car if you are afraid that I might tamper with it." Yes.