Is it permissible to purchase a car through a system offered by major companies, where one opens a bank account with a value equal to the car's price, links it as a deposit with an annual profit, then signs a car loan agreement with a lower interest rate, and links the deposit as collateral for the loan, knowing that the net result is receiving a larger sum than what was paid?
Source: FtawySummary from Ftawy's records · added here Sep 2, 2026
This transaction is forbidden from several perspectives:
Firstly: Cooperating with an interest-based bank is forbidden by Islamic law.
Secondly: Opening an account with an annual interest rate (9%) is considered explicit usury (riba).
Thirdly: Signing a car loan with an interest rate (6%) is explicit usury.
Fourthly: Hypothecating the deposit for the loan and the bank taking its interest while giving a portion of it to the client is a forbidden act.
A bank cannot give a loan for less than what it has paid, and every loan that draws a benefit is usury, whether the benefit is tangible or intangible.
Summary from Ftawy's records · added here
Reviewed by El Fatwa's sharia committee.
Read the full answer on Ftawyhttps://ftawy.com/en/questions/101168
Where this answer came from
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- Ftawy
- Original fatwa ID
- 101168
- 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