Category: the book of sales Transactions

The ruling on selling Products on delayed (Credit) Payment for more than its current Price

Question :

A man sells a product for an up-front price of 10 pounds for example, and for payments to be paid in monthly installments at a price greater than this price (10 pounds). Is this extra increase in the price considered Riba (interest), or is there a percentage that the seller must stick to if he wants to sell by installments?

Answer:

If the matter is like what is mentioned, it is permissible to sell the product for a delayed (credit) payment for more than its current price. It makes no difference whether the person pays the price in installments or all at one time when the time for payment comes. However, this is under the condition that the two parties do not separate until they make the type of sale specific and they agree on it being for cash up front or a payment to be made later. The increase is not Riba and there is no text in the Islamic law to limit the amount of the increase in sales for delayed (credit) payment in place of the sale for cash up front. However, the Messenger encouraged leniency in buying and selling, and in paying and seeking payment.

Source:
The Permanent Committee
Fatawa Islamiyah, Vol. 4 Pages 357-358