Topics: Islamic Finance

Is Deferred Payment Permissible in Islam? A Guide to Usury-Free Transactions

Understanding Deferred Payment in Islamic Trade: Conditions and Clarifications

Question: If a person sells something and says that they will take the payment after a certain period, such as selling wheat, rice, or a buffalo and deciding to take the payment after six months or a year, is this permissible or is it considered a usurious transaction?

Answer: If a person sells something now, finalizes the deal, and delivers the goods, but the buyer pays the price later, for example, after six months, there is no harm in this. This trade is permissible. However, a few clarifications regarding this trade are necessary:

1. The price of the items should be fixed at the time of sale, and the price should not include any additional amount for the six-month period, as is common in installment businesses where the cash price is different from the credit price. The price should be determined based on the current time because charging extra for the delay is considered usury.

2. The price should not be changed later.

3. The most important condition is that no financial penalty should be imposed if the payment is not made at the agreed time.

 Sheikh Maqbool Ahmed Salafi (May Allah protect him)

❪Jeddah Dawah Center, Hayy Al-Salamah – Saudi Arabia❫

Author: IslamicHelper

IslamicHelper

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