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Halal Money & business

Can the price be higher when paying in installments?

Short answer

Yes, according to most scholars, if the price and the payment dates are agreed at the start, with no extra charge added later for delay. This is a sale, not a loan with interest. Late-payment penalties that grow with time are riba.

Evidence

Quran

يَٰٓأَيُّهَا ٱلَّذِينَ ءَامَنُوٓا۟ إِذَا تَدَايَنتُم بِدَيْنٍ إِلَىٰٓ أَجَلٍۢ مُّسَمًّۭى فَٱكْتُبُوهُ ۚ وَلْيَكْتُب بَّيْنَكُمْ كَاتِبٌۢ بِٱلْعَدْلِ ۚ وَلَا يَأْبَ كَاتِبٌ أَن يَكْتُبَ كَمَا عَلَّمَهُ ٱللَّهُ ۚ فَلْيَكْتُبْ وَلْيُمْلِلِ ٱلَّذِى عَلَيْهِ ٱلْحَقُّ وَلْيَتَّقِ ٱللَّهَ رَبَّهُۥ وَلَا يَبْخَسْ مِنْهُ شَيْـًۭٔا ۚ فَإِن كَانَ ٱلَّذِى عَلَيْهِ ٱلْحَقُّ سَفِيهًا أَوْ ضَعِيفًا أَوْ لَا يَسْتَطِيعُ أَن يُمِلَّ هُوَ فَلْيُمْلِلْ وَلِيُّهُۥ بِٱلْعَدْلِ ۚ وَٱسْتَشْهِدُوا۟ شَهِيدَيْنِ مِن رِّجَالِكُمْ ۖ فَإِن لَّمْ يَكُونَا رَجُلَيْنِ فَرَجُلٌۭ وَٱمْرَأَتَانِ مِمَّن تَرْضَوْنَ مِنَ ٱلشُّهَدَآءِ أَن تَضِلَّ إِحْدَىٰهُمَا فَتُذَكِّرَ إِحْدَىٰهُمَا ٱلْأُخْرَىٰ ۚ وَلَا يَأْبَ ٱلشُّهَدَآءُ إِذَا مَا دُعُوا۟ ۚ وَلَا تَسْـَٔمُوٓا۟ أَن تَكْتُبُوهُ صَغِيرًا أَوْ كَبِيرًا إِلَىٰٓ أَجَلِهِۦ ۚ ذَٰلِكُمْ أَقْسَطُ عِندَ ٱللَّهِ وَأَقْوَمُ لِلشَّهَٰدَةِ وَأَدْنَىٰٓ أَلَّا تَرْتَابُوٓا۟ ۖ إِلَّآ أَن تَكُونَ تِجَٰرَةً حَاضِرَةًۭ تُدِيرُونَهَا بَيْنَكُمْ فَلَيْسَ عَلَيْكُمْ جُنَاحٌ أَلَّا تَكْتُبُوهَا ۗ وَأَشْهِدُوٓا۟ إِذَا تَبَايَعْتُمْ ۚ وَلَا يُضَآرَّ كَاتِبٌۭ وَلَا شَهِيدٌۭ ۚ وَإِن تَفْعَلُوا۟ فَإِنَّهُۥ فُسُوقٌۢ بِكُمْ ۗ وَٱتَّقُوا۟ ٱللَّهَ ۖ وَيُعَلِّمُكُمُ ٱللَّهُ ۗ وَٱللَّهُ بِكُلِّ شَىْءٍ عَلِيمٌۭ ﴿٢٨٢﴾

Enyi mlio amini! Mnapo kopeshana deni kwa muda ulio wekwa, basi andikeni. Na mwandishi aandike baina yenu kwa uadilifu, wala mwandishi asikatae kuandika. Aandike kama alivyo mfunza Mwenyezi Mungu. Na mwenye deni juu yake aandikishe; naye amche Mwenyezi Mungu, Mola wake Mlezi. Wala asipunguze chochote ndani yake. Na akiwa mwenye kudaiwa ni mtu aliye pumbaa au mnyonge au hawezi kuandikisha mwenyewe, basi aandikishe mlinzi wake kwa uadilifu. Na mshuhudishe mashahidi wawili katika wanaume wenu. Ikiwa hapana wanaume wawili, basi mwanamume mmoja na wanawake wawili katika mnao waridhia kuwa mashahidi. Ili ikiwa mmoja wao akipotea, mmoja wao amkumbushe mwengine. Na mashahidi wasikatae waitwapo. Wala msipuuze kuliandika deni likiwa dogo au kubwa mpaka muda wake. Hayo ndiyo haki zaidi mbele ya Mwenyezi Mungu, na ndiyo sawa zaidi kwa ushahidi, na vyema zaidi ili msiwe na shaka. Ila ikiwa ni biashara ya mkono-kwa-mkono baina yenu, basi hapo si vibaya kwenu msipo iandika. Lakini mnapo uziana wekeni mashahidi. Wala asitiwe matatani mwandishi wala shahidi. Na mkifanya hivyo basi hakika hilo ni kosa kwenu. Na mcheni Mwenyezi Mungu. Na Mwenyezi Mungu anakufundisheni. Na Mwenyezi Mungu ni Mjuzi wa kila kitu.

This is general information, not a fatwa. For your own situation, ask a qualified scholar.

Questions about halal and haram

Can the price be higher when paying in installments?

Yes, according to most scholars, if the price and the payment dates are agreed at the start, with no extra charge added later for delay. This is a sale, not a loan with interest. Late-payment penalties that grow with time are riba.

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