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Credit with limited interest-free grace period

Published: 24/08/2011 10:41:00 AM GMT
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I have account that allows me to purchase something like a computer on credit and then pay the money within a year interest free. However, if you fail to pay it off within that timeframe, then you will have to pay interest. Is it permissible to accept such a condition if you know that you can pay it off within a year?

Answered by

Sheikh `Abd Allah al-`Umrânî, professor at al-Imâm University in Riyadh

The invalid condition will not affect the validity of the contract. Such a condition, however, would be deemed null and void in Islamic Law while the contract itself would still stand.

This ruling is drawn from Burayrah’s story in the hadîth related by `A'ishah.

If you know or have reason to believe that you will not be able to pay on time, then it will be unlawful to you to make a purchace in this manner. In that case, you are executing a contract of usury which is one of the gravest of sins.

However, if you believe that you can handle the payment from your own sources or from a friend in case of need, then it is lawful for you regardless of the invalid conditions.

If you are not sure, it is preferable to avoid getting involved in such a transaction to save yourself from violating Allah’s law.

Source: Islam Today

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