Charging a higher price for goods sold on credit

Question

Question: (1) If someone, out of necessity, borrows money and then gives some item in repayment of it, the person who gave the money values it far below the market price — for example, the price of paddy (unhusked rice) is 160 rupees, but he fixes the rate at 100 rupees. Is this right or not? (2) The cash price of an ox or a she-buffalo is 2 thousand, but on credit, even after something has been paid, double to two and a half times is taken. What is the ruling on the one who takes this?

Answer

In buying and selling, if the price is paid in cash it is generally lower, and if the transaction is on credit the price is higher. In the Shari‘a this is valid, but a large difference is ungenerous, especially when the buyer is needy — he has no grain to subsist on, or it is the season of cultivation and he has no ox, nor money to pay in cash, so he takes on credit out of…

Source: Fatawa Mahmudiyya

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