Took a car loan with zero interest for 36 months
11-9-2007 | IslamWeb
Question:
Bismillaah Alhamdulillaah , Assalaatu Wassalaamu ‘Ala Rasoolillah Wa ‘Ala Aalihi Wa Sahbihee Wa Sallaam. Assalamu ‘Alaikum Wa Rahmatullaah. Dear Brothers May Allaah bless us to refrain from committing sins and May Allaah forgive our sins. I’m in big confusion that, I took a car loan from one of usuary bank (non Islamic bank). The thing is, their offer is Zero (0%) interest for 36 months and I went and took the car and paid them 36 cheques. but if someone have to take it for 48 months or more than 36 months installment, they have to pay interest from 37th months onwards. Their advertisement was also in this way. So I took it for 36 months installments and it is interest free. My doubt is that is this deal haram? If this deal is haram what will I do now. As I paid my cheques and I’m using the car. Please advice
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 
is His slave and Messenger.
Taking a loan from a usurious bank is not allowed whether it is to purchase a car or something else, even if the bank states that no interest will be charged if the debtor repays within the agreed upon period but at the same time the bank conditions charging interest if the debtor delays the payment. See Fatwa 88473.
Therefore, whoever was involved in that should repent to Allaah and should try his best to get rid of this contract and reject it. If this is not possible, then he should exert all efforts to pay the amount during the fixed period to avoid paying any interests (extra amount).
However, if the bank gives an interest free loan without charging any extra amount if the debtor does not repay in the given period (which is 36 months), then we do not see any impediment in this loan, because it is free from all prohibitions. However, we do not think that usurious banks will grant such loans.
Allaah Knows best.