The Difference Between Riba al-Nasi'ah and Tawarruq

Question:
From the definition of riba al-nasi'ah (usury of deferment): it is an increase in the item in exchange for deferral. To what extent does this apply to the bag loans and car loans currently in use instead of the benevolent loan? Please advise us, may Allah reward you with good.

Answer:
What covers this is that riba is taking something of the same kind with an increase; this is riba al-fadl (usury of excess). If it is a debt for a debt, it becomes both riba al-fadl and riba al-nasi'ah. So if he takes dirhams for dirhams with an increase, this is riba al-fadl, whether it is hand-to-hand or deferred.
As for the issue of tawarruq (a commodity sale used to obtain cash), it is not of this category. He takes a commodity for dirhams to a term, then sells it—at his own choice—on that day, the next day, or later. He did not take a ribawi item for a ribawi item; rather, he took a commodity of food, or a car, or land, or something else for a known number of dirhams to a known term, so it is not of riba in any way.