I want to purchase a car but the car originial price is 4.0 lakh in cash,but i dont have sufficiant amount in cash,so one of the third party(bank,finance party) is ready to give the full amount on the basis of part payment for 5 years, but he will claim on that amount total 5.0 lakh after completion of 5 years on the basis of per month installment.which have been fixed amount before purchasing a car in the agreement. Ques 1 : So please let me know that weather this type of finance is permissible in Islamic sharia or is it come under the normal interest pattern?
Answer:
(Fatwa: 812/L=291/tl=1432)
According to Shariah, it is haram to have interest based loan from bank. However, if you buy the car from the bank in a way that first the bank buys the car and includes as much interest as much it wants in the original price of the car and then sells you and you pay it on instalments, then it is allowed.
Allah (Subhana Wa Ta’ala) knows Best
Darul Ifta,
Darul Uloom Deoband