Car loan scheme
Bismillahir Rahmanir Rahim
Assalamu Alaikum Oa Rahmatullah
May Allah Bless You every Success of Here and Hereafter.
An employer facilitates CAR LOAN SCHEME for his employees. The contract details of the loan are as follows:
(1) An employee will be eligible for the loan after five years of service at the company.
(2) He will be given Taka. 1000000.00 (One Million) as loan but he has to return Taka 1100000.00 (One Million and One Hundred Thousand) within 5 years (maximum).
(3) If the employee leaves his job, he has to pay the rest loan amount in full, otherwise the employer will take the car at his possession to accrue the rest amount.
(4) The employee has to submit the car purchase documents at the office.
(5) He has to use the car personally and will have no right to sell the car before five years (commercial life of the car as per company rule)
(6) He has to submit legal papers according to the country law that will prohibit him to sell the car before paying the loan amount.
Now My question is: Is it permissible to take this loan facility?
In the Name of Allah, the Most Gracious, the Most Merciful.
As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.
Our understanding of the scheme is that the employer extends a 1 Million Taka loan to the employee so that the employee may purchase a car. Thereafter, within 5 years, the employee must return the loan amount with an additional 1 Hundred Thousand Taka.
If this understanding is correct, then such a scheme is impermissible as it is clearly interest.
And Allah Ta’āla Knows Best
(Mufti) Abdul Azeem bin Abdur Rahman
The Shar’a ruling herein given is based specifically on the question posed and should be read in conjunction with the question.
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 [مَطْلَبٌ كُلُّ قَرْضٍ جَرَّ نَفْعًا حَرَامٌ]
(قَوْلُهُ كُلُّ قَرْضٍ جَرَّ نَفْعًا حَرَامٌ) أَيْ إذَا كَانَ مَشْرُوطًا كَمَا عُلِمَ مِمَّا نَقَلَهُ عَنْ الْبَحْرِ، وَعَنْ الْخُلَاصَةِ وَفِي الذَّخِيرَةِ وَإِنْ لَمْ يَكُنْ النَّفْعُ مَشْرُوطًا فِي الْقَرْضِ، فَعَلَى قَوْلِ الْكَرْخِيِّ لَا بَأْسَ بِهِ وَيَأْتِي تَمَامُهُ (رد المحتار، ج 5، ص 166، سعيد)