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The question

What is the ruling on purchasing a car in installments from an interest-based bank with interest, while the ownership of the car remains with the bank until the full amount is paid, or its ownership remains with the dealership until payment?

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Source: FtawySummary from Ftawy's records · added here Sep 2, 20261 min readAlso available in العربية
The answer

It is not permissible to deal with usurious banks when Shariah-compliant alternatives are available. However, if no such alternatives exist and the person engaging in the transaction is in need of it, and the transaction adheres to Shariah controls—such as the bank genuinely owning the car before selling it to the client, and not stipulating an increase in case of late payment—then there is no harm in it. The bank’s requirement to register the car in its name in official documents as collateral until the price is paid in full does not matter. What is important is that the bank owns the car before selling it and that ownership transfers to the client.

Summary from Ftawy's records · added here

Reviewed by El Fatwa's sharia committee.

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Where this answer came from
Source platform
Ftawy
Original fatwa ID
106037
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.
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Read the full answer on Ftawy