Buying on instalments

Question

Question: Some shopkeepers sell bicycles, sewing machines, engines and the like in instalments. The form of it is that mostly the instalment is of one hundred rupees, and they collect at the rate of ten rupees a month for two years; in this way it comes to one hundred and twenty rupees in one year. If bought for cash it is for one hundred rupees, and in instalments one has to pay one hundred and twenty rupees. Is this permissible or not?

Answer

There generally is a difference between the cash price and the credit price; there is no harm in that. But it should not be that, if some instalment is not paid on time, his item — the bicycle, machine or the like — is taken back and the amount already paid is also confiscated, for that is impermissible.

Source: Fatawa Mahmudiyya

Preview. The full text opens with JavaScript enabled.