Author: Dr. Muhammad Ziya-ur-Rahman Azmi رحمه الله
◈ Ruling on Buying Vehicles and Furniture Through Installment Plans ◈
If the furniture or vehicle is present with the seller, and the buyer intends to purchase that exact item, then buying it on installments is permissible.
This is based on the generality of the following verses:
"وَأَحَلَّ اللَّهُ الْبَيْعَ وَحَرَّمَ الرِّبَا"
[Surah al-Baqarah: 275]
"Allah has permitted trade and forbidden interest."
And:
"يَا أَيُّهَا الَّذِينَ آمَنُوا إِذَا تَدَايَنتُم بِدَيْنٍ إِلَىٰ أَجَلٍ مُّسَمًّى فَاكْتُبُوهُ"
[Surah al-Baqarah: 282]
"O you who believe! When you contract a debt for a fixed term, write it down."
Thus, buying on deferred payment or installments, where the item is in the seller’s ownership and possession, is Shari‘ah-compliant.
However, if:
Then this transaction is not permissible, because it becomes a deceptive means of interest (ḥīlah li’l-ribā).
What actually happens in such cases:
This is essentially a loan with interest in disguise, not a genuine trade.
This is known as “Tawarruq”, and scholars have differed over its ruling.
✔ Caution dictates avoiding such transactions, especially when the motive is financial gain or liquidity, not genuine purchase.
✔ This is because in commercial reality, profit and loss are both possible,
✖ Whereas in these installment-based "tricks", the buyer often pays more purely for time, which is a form of loss and resembles usury.
Ibn ʿUthaymīn – Nūr ʿala al-Darb 18/243
◈ Ruling on Buying Vehicles and Furniture Through Installment Plans ◈
❖ The Basic Ruling:
If the furniture or vehicle is present with the seller, and the buyer intends to purchase that exact item, then buying it on installments is permissible.
This is based on the generality of the following verses:
"وَأَحَلَّ اللَّهُ الْبَيْعَ وَحَرَّمَ الرِّبَا"
[Surah al-Baqarah: 275]
"Allah has permitted trade and forbidden interest."
And:
"يَا أَيُّهَا الَّذِينَ آمَنُوا إِذَا تَدَايَنتُم بِدَيْنٍ إِلَىٰ أَجَلٍ مُّسَمًّى فَاكْتُبُوهُ"
[Surah al-Baqarah: 282]
"O you who believe! When you contract a debt for a fixed term, write it down."
Thus, buying on deferred payment or installments, where the item is in the seller’s ownership and possession, is Shari‘ah-compliant.
❖ Impermissible Scenario – ʿĪnah Sale:
However, if:
- The seller enters into a Bayʿ al-ʿĪnah arrangement,
- i.e., he purchases the item on request from another source and then sells it to the buyer,
Then this transaction is not permissible, because it becomes a deceptive means of interest (ḥīlah li’l-ribā).
What actually happens in such cases:
- The trader buys the item (e.g., a car or furniture) for 100
- And sells it to the buyer for 120
- But the buyer never intended to possess or use the item — only to resell it and benefit from the cash,
This is essentially a loan with interest in disguise, not a genuine trade.
❖ The Issue of Tawarruq:
This is known as “Tawarruq”, and scholars have differed over its ruling.
- Some allow it,
- While others, such as Shaykh al-Islām Ibn Taymiyyah, prohibit it, especially in commercial contexts.
❖ The Safer Approach:
✔ Caution dictates avoiding such transactions, especially when the motive is financial gain or liquidity, not genuine purchase.
✔ This is because in commercial reality, profit and loss are both possible,
✖ Whereas in these installment-based "tricks", the buyer often pays more purely for time, which is a form of loss and resembles usury.
Ibn ʿUthaymīn – Nūr ʿala al-Darb 18/243