I want to purchase the car on Loan from the Nationalised Bank. The bank will give the money directly to the Car Distributor. and the car Distributor give the car to me and I will pay in instalment to the Bank (with the amount Intrest) Is it permisible uner shariat Law or not?
Answer
(Fatwa: 1466/1271=B/1429)
It is unlawful to pay instalment with interest. As taking interest is forbidden giving is also forbidden and prohibited. This may be allowable in a way that first the bank purchases the car and adds interest amount to the original price and you purchase the car on the total price and pay it on instalment. Thus, one may save himself from paying interest.
Allah (Subhana Wa Ta’ala) knows Best
Darul Ifta,
Darul Uloom Deoband