What is the ruling on financing the purchase of a car in installments from an interest-based bank that imposes interest and late fees, knowing that the bank does not disburse the amount in cash but rather provides a contractual agreement?
Source: FtawySummary from Ftawy's records · added here Sep 2, 2026
Usury (Riba) is inherent in this transaction from every aspect, starting with the interest stipulated at the time of the contract, and extending to the late payment penalty, which is one of the two forms of pre-Islamic usury (Riba al-Jahiliyyah), where the creditor would tell the debtor: "Either you pay, or you increase [the debt]."
Summary from Ftawy's records · added here
Reviewed by El Fatwa's sharia committee.
Read the full answer on Ftawyhttps://ftawy.com/en/questions/39050
Where this answer came from
- Source platform
- Ftawy
- Original fatwa ID
- 39050
- 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