Is it permissible to purchase a commodity by installments if the price of the commodity in the contract includes the market price and a predetermined fixed additional cost, with a discount during payment, and is this considered usury (riba)?
Financing through a loan with a fixed interest rate is prohibited usury (riba), unless the amount paid is small in exchange for actual administrative services. Any amount added beyond the actual services is considered usury. As for financing through murabaha (cost-plus sale), its permissibility is subject to three conditions: that the bank genuinely purchases the commodity and takes possession of it before selling it to the customer, and that the bank does not stipulate a penalty for late payment of installments.
Summarized from the full answer at Ftawy · reviewed Sep 2, 2026
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