His second question asks: What is the ruling in Islam on buying and selling on installment, given that the price in the case of installments is higher than the price for immediate payment?
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The questioner : His second question asks: What is the ruling in Islam on buying and selling on installment, given that the price in the case of installments is higher than the price for immediate payment?
The Shaykh : There is nothing wrong with this, by the consensus of the scholars. If a person buys a commodity because he needs it for a deferred price, whether it is due in one lump sum or in installments, there is nothing wrong with that. More than one scholar has reported the consensus of the scholars on its permissibility.
The questioner : Yes.
The Shaykh : It is well known that if it is on installment, its price will increase, because the seller does not sell something whose price is deferred at the same price as something whose price is cash. This is one of the merits of the Shari'ah that it is permissible, because the seller benefits from the increase in price, and the buyer benefits from the deferral of the price.
However, if the sale is completed as a cash transaction, and then the buyer comes to the seller and says, "Defer it for me with an increase," then this is not permissible, because it is riba (usury or interest). For example, if he sells him this car for ten thousand, say, and then the buyer does not find the ten thousand, he returns to the seller and says, "I did not find the ten thousand, but defer it for me for twelve thousand." Then this is not permissible, because the buyer has a cash debt established in his liability, and deferring it with an increase is clear riba (usury or interest), and thus it is forbidden.
The questioner : Yes, thank you. May Allah reward you.
The Shaykh : There is nothing wrong with this, by the consensus of the scholars. If a person buys a commodity because he needs it for a deferred price, whether it is due in one lump sum or in installments, there is nothing wrong with that. More than one scholar has reported the consensus of the scholars on its permissibility.
The questioner : Yes.
The Shaykh : It is well known that if it is on installment, its price will increase, because the seller does not sell something whose price is deferred at the same price as something whose price is cash. This is one of the merits of the Shari'ah that it is permissible, because the seller benefits from the increase in price, and the buyer benefits from the deferral of the price.
However, if the sale is completed as a cash transaction, and then the buyer comes to the seller and says, "Defer it for me with an increase," then this is not permissible, because it is riba (usury or interest). For example, if he sells him this car for ten thousand, say, and then the buyer does not find the ten thousand, he returns to the seller and says, "I did not find the ten thousand, but defer it for me for twelve thousand." Then this is not permissible, because the buyer has a cash debt established in his liability, and deferring it with an increase is clear riba (usury or interest), and thus it is forbidden.
The questioner : Yes, thank you. May Allah reward you.