Is lease-to-own considered Riba (usury), what is the reason for its prohibition, what must one do if they regret entering into such a contract, and should they continue payments or stop, given the existence of penalty clauses in the agreement?

Leasing ending in ownership has permissible and impermissible forms, as clarified by the Islamic Fiqh Academy. The criterion for prohibition is the combination of two different contracts for a single item at the same time. The criterion for permissibility is the existence of two contracts separated by time, such that the sale occurs after the lease, or there is a promise of ownership, and the lease is actual. The leased item must be guaranteed by the owner, and insurance must be cooperative, not commercial, and borne by the owner. The rules of leasing then selling apply, and non-operational maintenance expenses are the responsibility of the lessor.

Among the prohibited forms are: the automatic conversion of a lease into a sale without a new contract, a lease contract combined with a sale contingent upon payment of all rent, or a true lease coupled with a sale with a stipulated option for the lessor, deferred until the end of the lease term.

Among the permissible forms are: a lease coupled with a gift of the item to the lessee, contingent upon full payment of the rent, or a lease with an option to purchase the item at market price after completing the installments, or a lease coupled with a promise to sell the item after payment of the rent at an agreed-upon price, or a lease giving the lessee the option to acquire ownership of the item through a new contract at market price.

The nature of the contract concluded with the institution has not been clarified to determine its ruling.