Mu' meneen Brothers and Sisters,

As Salaam Aleikum wa Rahmatullahi wa Barakatuh.  (May Allah's Peace, Mercy and Blessings be upon all of you)

One of our brothers/sisters has asked this question:

is Installment is haram? I purchsae some thing on installment they take extra money on that,Please give me early reply thanks.

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Answer:

Installments and interest

In the name of Allah, We praise Him, seek His help and ask for His forgiveness. Whoever Allah guides none can misguide, and whoever He allows to fall astray, none can guide them aright. We bear witness that there is none worthy of worship but Allah Alone, and we bear witness that Muhammad (saws) is His slave-servant and the seal of His Messengers.

There is absolutely nothing in the Shariah which prohibits or restrains the believers from paying for something in installments, provided one is not asked to pay anything above the principal amount of purchase…for that increase would then be ‘riba’ or interest…..and the receiving or paying of ‘riba’ and interest is absolutely and unconditionally prohibited in Islam.

Allah says in the Holy Quran Chapter 2 Surah Baqarah verse 274-276:

But those who devour ‘riba’ become like the one whom Shaitaan has bewitched and maddened by his touch. They have been condemned to this condition because they say, “Trade is just like ‘riba”, whereas Allah has made trade halaal and ‘riba’ haraam. Henceforth, if one abstains from taking ‘riba’ after receiving this admonition from his Lord, no legal action shall be taken against him regarding the ‘riba’ he had devoured before: his case shall ultimately go to Allah. But if one repeats the same crime even after this, he shall go to Hell, where he shall abide for ever! Allah deprives ‘riba’ of all blessing and develops charity, and Allah does not like an ungrateful, sinful person.

Allah says in the Holy Quran Chapter 2 Surah Baqarah verse 278:

O Believers!, fear Allah and give up that ‘riba’ which is still due to you, if you are true believers. But if you do not do so, then you are warned of the declaration of war against you by Allah and His Messenger!

Allah says in the Holy Quran Chapter 4 Surah Nisa verse 161:

That they took ‘riba’, although they were forbidden. And that they devoured men’s substance wrongfully. We have prepared for those among them who reject faith a grievous punishment (of Hell Fire)!

Al-Tirmidhi Hadith 2829 Narrated by Ali ibn AbuTalib

Ali said he heard Allah's Messenger (saws) invoke the curse of Allah on those who took usury, those who paid it, those who recorded it, and those who refused to give sadaqah.

For example: if a deal is agreed between the buyer and the seller to purchase a car for $10,000.00, and the seller agrees to accept an installment of $1,000.00 for ten months from the buyer….such a transaction is absolutely lawful in the Sight of Shariah Law.

But if the transaction for the purchase of the car is agreed at $10,000.00, and the seller demands or the buyer offers or agrees that he would pay 11 (or 12, 13, 14, etc.) installments of $1,000.00 per month to cover for the delay in payment….any increase from the agreed purchase amount would be a clear manifestation of ‘riba’ and interest….and such a transaction would be absolutely unlawful and prohibited in Islam.

Thus beloved brother, it is not the concept of paying or receiving installments which is unlawful in Islam; but if there is even one-cent increase between the agreed purchase amount and the total installments to be paid, then that increase would be a clear manifestation of the unlawful concept of ‘riba’ and interest, a concept which has been declared absolutely unlawful and ‘haraam’ for the believers by Allah and His Messenger (saws).

Whatever written of Truth and benefit is only due to Allah’s Assistance and Guidance, and whatever of error is of me alone. Allah Alone Knows Best and He is the Only Source of Strength.

Your brother and well wisher in Islam,

Burhan