Company paying interest changes not the ruling
Fatwa No: 32483

  • Fatwa Date:30-1-2014 - Rabee' Al-Awwal 29, 1435
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Question

As-Salamu ‘Alaykum,
Is it unlawful to buy a car on loan, given that the car is necessary in my work? Having no car will result in definite harm. It should be known that the company will pay the interest of the loan and I will not bear any loss. 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.

A loan on interest is unlawful, whether the company pays the interest or not. As long as there is a loan on the basis of stipulated interest, it is one sort of unlawful Riba. Allaah Almighty Says (what means): {O you who have believed, fear Allaah and give up what remains [due to you] of interest, if you should be believers.} [Quran 2:278]

Jaabir  may  Allaah  be  pleased  with  him said, "The Messenger of Allaah, sallallaahu ‘alayhi wa sallam, cursed the one who consumes  Riba  and its payer, and the one who records it, and the two witnesses, and he said: 'They are equal [in sin].'" [Muslim]

The necessity which permits dealing in Riba is compelling necessity that it is most likely to result in harm or unbearable hardship such as not finding clothes to wear or a house to live in, even if by renting.

There is no necessity mentioned in your question that permits taking a loan on interest. You can buy a car through the permissible process of Muraabahah or take a loan from a person or authority, without paying interest. You should not indulge in a Riba-based transaction like this one.

Allaah Knows best.

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