Price increase in selling by installments has no maximum
Fatwa No: 16860

Question

Is it permissible to buy and sell in installments, taking into consideration that such a transaction increases the commodity’s price in different rates? Are there specific conditions for selling by installments; such as the type of the commodity, the amount of the installments, the rate of increase, time interval, and so on?
Please advise. May Allaah Reward you.

Answer

All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad, sallallaahu ‘alayhi wa sallam, is His slave and Messenger.

Selling by installments is permissible. It is the sale of a specific item for a specific price within a specific time. In this type of sale, the buyer is scheduled to make a series of monthly or annual payments over a period of time according to the concluded contract between him and the seller. There is no limit for the increase which the seller will get in return for the time. He is allowed to add a suitable extra amount of money in every deal in installment according to how long or short the term is and so on, provided that such an increase should be specified and previously agreed upon at the time of contracting.

Allaah Knows best.

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