Author: Dr. Muhammad Ziya-ur-Rahman Azmi رحمه الله
◈ Ruling on a Sale Involving Increase in Price Upon Delay in Payment ◈
What is the ruling on a transaction where a seller says to a buyer:
“I sell you this car for 60,000 on one year’s credit. If you fail to pay within that year, the price will increase to 70,000.”
This condition is set at the time of the contract.
✖ This contract is ḥarām (forbidden) because it involves interest (ribā).
Such a condition — where increase is tied to delay in payment — is a clear form of ribā al-nasīʾah (interest due to time extension), and is thus impermissible in Sharīʿah.
✔ If the seller is concerned that the buyer may delay payment, he can:
For example:
Likewise, if sold on one-year credit for 1,500,
→ That too is permissible, provided it is agreed at the start.
But to say:
“If you fail to pay 1,500 after one year, you’ll owe 2,000,”
✖ This is explicit usury and prohibited.
Allah ﷻ says:
"وَأَحَلَّ اللَّهُ الْبَيْعَ وَحَرَّمَ الرِّبَا"
[Surah al-Baqarah: 275]
"Allah has permitted trade and forbidden interest."
Thus, trade is lawful, but any increment tied to payment delay is ribā and thus forbidden.
Ibn ʿUthaymīn – Nūr ʿala al-Darb 36/235
◈ Ruling on a Sale Involving Increase in Price Upon Delay in Payment ◈
❖ The Question:
What is the ruling on a transaction where a seller says to a buyer:
“I sell you this car for 60,000 on one year’s credit. If you fail to pay within that year, the price will increase to 70,000.”
This condition is set at the time of the contract.
❖ The Ruling:
✖ This contract is ḥarām (forbidden) because it involves interest (ribā).
Such a condition — where increase is tied to delay in payment — is a clear form of ribā al-nasīʾah (interest due to time extension), and is thus impermissible in Sharīʿah.
❖ The Correct Sharʿi Approach:
✔ If the seller is concerned that the buyer may delay payment, he can:
- Set a longer deadline from the beginning,
- Or fix the price accordingly for that extended duration.
For example:
- If the current price of a car is 1,000, and its deferred price after two years is 2,000,
→ Then selling it on two-year credit for 2,000 is permissible.
Likewise, if sold on one-year credit for 1,500,
→ That too is permissible, provided it is agreed at the start.
But to say:
“If you fail to pay 1,500 after one year, you’ll owe 2,000,”
✖ This is explicit usury and prohibited.
❖ Qur’anic Foundation:
Allah ﷻ says:
"وَأَحَلَّ اللَّهُ الْبَيْعَ وَحَرَّمَ الرِّبَا"
[Surah al-Baqarah: 275]
"Allah has permitted trade and forbidden interest."
Thus, trade is lawful, but any increment tied to payment delay is ribā and thus forbidden.
Ibn ʿUthaymīn – Nūr ʿala al-Darb 36/235