What is the difference between a loan and an installment sale in terms of permissibility or prohibition according to Islamic law?
Source: FtawySummary from Ftawy's records · added here Sep 2, 2026
There is a significant difference between selling by installment and a loan. A loan is a gratuitous contract, intended for assistance, while a sale is a commutative contract, intended for benefit and profit. An increase in the price of a commodity in exchange for deferment is permissible, whereas an increase in a loan over the principal is forbidden because it contradicts the purpose of assistance.
Summary from Ftawy's records · added here
Reviewed by El Fatwa's sharia committee.
Read the full answer on Ftawyhttps://ftawy.com/en/questions/53121
Where this answer came from
- Source platform
- Ftawy
- Original fatwa ID
- 53121
- Added here
- . This is when the answer was added to El Fatwa, not the fatwa's date.
- Text
- Summary from Ftawy's records, reviewed by El Fatwa's sharia committee.
- Read the full ruling
- Read the full answer on Ftawy