Installment Purchases and the Shar‘i Ruling on Qard Hasan (Interest-Free Loan)
Question:If a person does not have enough funds to purchase a vehicle or any item in a lump sum and wants to pay in installments—but the current installment systems are unreliable—can he take a Qard Hasan (interest-free loan) and repay it in installments? Or can the lender first purchase the item and then sell it in installments? Is this permissible in Islam?
Answer by: Fadhīlat al-Bāḥith Nūʿmān Khaleeq ḥafiẓahullāh
Both Scenarios Are Sharʿīly Permissible
Detailed explanations are outlined below:
❶ Purchasing Through
✔ If someone takes a Qard Hasan from a friend to fulfill a need and repays it in installments, it is completely permissible.
✔ Qard Hasan is a commendable act in Islam, and no profit or interest may be charged on it.
❷ Selling on Installments After Ownership:
✔ If the lender first purchases the item and becomes its rightful owner, and then sells it on installments to another person, this is also permissible.
✔ Shar‘i Condition:
The seller must first become the owner of the item before selling it.
✔ It is permissible to fix a higher total price for installment payments. This does not fall under interest (ribā); rather, it is a form of valid trade.
Adherence to Sharʿī Principles:
◈ The seller must gain full ownership of the item before selling.
◈ The installment amount and duration must be clearly specified and agreed upon in advance, to avoid deception or uncertainty.
Conclusion:
❶ In the case of Qard Hasan:
It is permissible and encouraged to take a loan from a friend and repay it in installments, provided there is no interest involved.
❷ In the case of installment sale:
If the lender first purchases the item, becomes its legal owner, and then sells it in installments, this is also Sharʿīly valid—as long as all Islamic conditions are met.
