Fatwa #1690314 July 2008South Africa
The payment on the car loan involves interest
Question
A person took out a loan from a bank to buy a car. The payment on the loan involves interest. After a couple of months the person wants to change his/her life and wants to stop all the evil he is involved in, like interest. The person still has 2years to pay the car off. Is there any advice for this person after he has engaged in touba?
Answer
In the name of Allah, Most Gracious, Most Merciful
Assalaamu `alaykum waRahmatullahi Wabarakatuh
In order to free oneself from an existing interest bearing vehicle loan, we advise the following:
1. One may take an “interest free loan” from a friend and pay off the entire debt owed to the bank. This will cease the interest bearing loan with the bank immediately. However, forgiveness must be sought for involving oneself in interest.
2. With a prior arrangement and consent from the bank, one could sell the car and pay off the entire debt to the bank with the cash received. In this way, one will be freed from the interest bearing loan.
If one intends purchasing another car on terms, the Darul Ifta has structured an Ijarah contract for “Wesbank”, which is interest free and Shari’ah compliant. You may consult Wesbank Islamic Finance for further details.
And Allah knows best
Checked and Approved by:
Mufti Ebrahim Desai
Darul Iftaa