Wa Alaykum Assalam
Buying something in installment is halal If the product is owned by the company and is in their possession
There is nothing wrong with that, if the product is owned by the company and is in their possession. There is no reason why they should not sell it for a certain price, some of which is to be paid on the spot and some to be paid later on, or all of it to be paid later on, in instalments large or small
. End quote. From Majmoo’ Fataawa Ibn Baaz (19/8)
With regard to selling by installments, the ruling as far as the seller is concerned may be that it is mustahabb or permissible.
It may be mustahabb and he may be rewarded for it if his intention is to be easy-going to the purchaser and to help him to buy what he needs and he does not increase the price in return for allowing payment by installments if the customer is poor and in need, and he does not put pressure on him to pay it when it becomes due. Rather if the time for repayment comes and the customer does not have the money, he should give him more time, or let him off all or part of the price. Allaah says (interpretation of the meaning):
“And if the debtor is in a hard time (has no money), then grant him time till it is easy for him to repay; but if you remit it by way of charity, that is better for you if you did but know”
[al-Baqarah 2:280]
Shaykh al-Sa’di (may Allaah have mercy on him) said:
This means, if the one who owes the money is in difficulty, his creditor must wait until things become easier for him… If the creditor shows charity towards him – by letting him off all or part of the debt – then that is better for him. Tafseer al-Sa’di, p. 168
Al-Bukhaari (1307) and Muslim (1561) narrated that Abu Mas’ood (may Allaah be pleased with him) said: The Messenger of Allaah (peace and blessings of Allaah be upon him) said: “A man from among those who came before you was brought to account, and nothing good was found in him, apart from the fact that he used to deal with the people and he was well off, and he used to tell his slaves to let off the (debtor) who was in difficulty. Allaah said, ‘We have more right to that than him, let him off.’”
But if a dealer sells in installments and he increases the price in return for payment by installments, this is permissible. But some dealers sell only by installments, so that their profits will be greater. Imam Ahmad (may Allaah have mercy on him) stated that this is makrooh, but if the dealer sells both by installments and for cash, there is nothing wrong with that.
Shaykh al-Islam (Ibn Taymiyah – may Allaah have mercy on him) explained the reason for it being makrooh as being that it comes under the heading of exploitation because usually the one who buys with deferred payment is the one who is unable to pay cash, so if a man only sells by installments, it means that he is exploiting people who are in need, but if he sells both for cash and by installments, he is just an ordinary trader.
From Tahdheeb al-Sunan by Ibn al-Qayyim. ‘Awn al-Ma’bood, 9/347
Selling by installments for an increased price is permissible.
But the scholars stated that the additional amount should not be stipulated in the form of interest that is separate from the price. If the vendor does that then the transaction is haraam or makrooh.
Ibn Qudaamah (may Allaah have mercy on him) said in al-Mughni (2/266):
If he says, I will sell it to you at cost for one hundred, and I make a profit for one dirham for every ten, this was regarded as makrooh by Ahmad, and it was narrated from Ibn ‘Umar and Ibn ‘Abbaas that this is makrooh. We do not know of any of the Sahaabah who held a different opinion. It is regarded as makrooh but not in the sense of being haraam.
Shaykh Ibn ‘Uthaymeen (may Allaah have mercy on him) said in Risaalah fi Aqsaam al-Mudaayanah:
If in the contract the vendor says, “I will sell you this ten for eleven,” then it is either makrooh or haraam. It was narrated that Imam Ahmad said of such cases, It is as if he is selling dirhams for dirhams, which is not right. This is what Imam Ahmad said. Based on this, the correct way of going about it is for the lender to work out the value of the product and the amount of his profit, then he should say to the borrower, “I will sell it to you for such and such to be paid in one year.”
One of the resolutions issued by the Fiqh Council says the following:
According to sharee’ah, it is not permissible when selling something to be paid for later, to stipulate in the contract interest on the installments that is separate from the price so that it is connected to the time involved, whether the two parties agree to a rate of interest or they decide to follow the current rate of interest used by the banks.
The way of putting this matter right, as may be understood from the words of Shaykh Ibn ‘Uthaymeen quoted above – is for the vendor to say to the purchaser, “When will you pay the price?” If he says, “After one year” – for example – the vendor should look at the value of the item and work out the amount of the profit he wants, then say to the purchaser, “I will sell it to you for such and such on the basis that you will pay after one year” – without stating an additional cost that is separate from the price.
:Finaly:
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It is permissible to charge more for purchases by installment than when a person is paying in full at the time of purchase. It is also permissible to name one price for cash sales, and another for payment by installments made within certain periods. The sale is not valid unless both parties are certain about either cash or installments. If there is some indecision with regard to cash or installments, and the two parties fail to reach an agreement on one specific price, then the sale is not permissible according to sharee’ah.
According to sharee’ah, it is not permissible in the case of payment by installments, to state interest rates as a separate item based on the length of time taken to repay, regardless of whether the two parties agree on the rate of interest or it is based on the current rate.
If the purchaser is late in paying the installments, it is not permissible to make him pay extra, whether or not this is arranged as a prior condition, because this is a form of forbidden ribaa.
It is forbidden for a debtor who can afford the installments to delay payment when they are due. At the same time, according to sharee’ah it is not permissible to set a condition that he should pay compensation in the event of late payments.
According to sharee’ah, it is permissible to set a condition that the debtor has to bring forward the payment, if he delays some of the payments, so long as the debtor agrees to this condition at the time when the contract is drawn up.
The vendor does not have the right to keep the purchaser’s property after the item has been sold, but it is permissible for the vendor to stipulate some security as a guarantee that the purchaser will pay the installments.
(Majma’ al-Fiqh al-Islami, p. 109)
It is permissible according to sharee’ah to reduce the amount owing in order to expedite the settlement of the matter, whether this is done by request of the vendor or the purchaser. This is not counted as forbidden ribaa so long as it is not based on a prior agreement and so long as this agreement between the two parties is reached on a one-on-one basis, without the involvement of any third party, because in that case the rulings on the settlement of business accounts would apply.
It is permissible for the two parties to agree that all installments should be paid immediately if the debtor fails to make one payment, unless he is in difficulty and has no means of paying.
If the debt becomes due because the debtor dies, becomes bankrupt or delays payment, then in any of these circumstances it is permissible to reduce the debt so that the matter may be settled quickly to the mutual satisfaction of both parties.
The definition of hardship which means that the vendor should wait for payment is: that the debtor should not have more wealth or property than he needs to meet his basic requirements and pay his debt.
(Majma’ al-Fiqh al-Islami, p. 142)
And Allaah knows best.
Ur Br in islam Muhammed
