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Can I take a vehicle loan from a bank without violating Islamic principles?

Answered as per Hanafi Fiqh by Darulifta-Deoband.com
Assalamu Alaikum. I am presently living in Oman. In this country unlike in Sri Lanka or India it is difficult to find public transportation. Almost everyone has his or her car for transportation. So it has become a must having a car for one’s transport. I find its difficult to get a car paying a lump sum. I decided to approach a bank for vehicle loan. I am aware that riba is prohibited. But in this particular bank the loan amount and the interest portion everything is pre-determined. It will not fluctuate. This results a fixed monthly installment to be paid and there would not be a change in the installment, period of settlement, additional amount I am supposed to pay the bank. So my question is Can I relate this to the Islamic system since everything is pre-determined and my monthly installment is also fixed. please reply me. I need to take the decision with in the next coupkle of days.. May Allah Reward you…


(Fatwa: 1189/1018=B/1429)

If, instead of taking loan from the bank, it is dealt in a way that the bank first purchases car with its own money and then you purchase the car from the bank on price of the car along with the interest which has to be paid in instalments, including the interest in the total price. Later, there should be no other additional amount in the price in future and you pay the total price of the car thorough instalment. This procedure is interest-free and Islamically lawful, it can be called as an Islamic method.

Allah (Subhana Wa Ta’ala) knows Best

Darul Ifta,
Darul Uloom Deoband

This answer was collected from the official ifta website of Darul Uloom Deoband in India.

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