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I am trying to buy a new Mobile phone in a shop, but I don't have enough money to buy it as cash. He offered me something else called Monthly premium.

This Monthly premium is good for me, but the price of the stuff is higher than if I buy it as a cash.

For example:

If I buy as a cash, it'll cost $550 otherwise, it costs $600 if I get it through monthly premium (I'll pay $100 monthly)

Is this $50 considered Riba or not ?

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No it is not Riba because your are buying a physical item and not borrowing money. The seller can change the price prior to the transaction as he wants. It would have been Riba if he was lending you money. But here, he is selling you an item. That is a clear difference between a Buy/Sell an item transaction (Halal) and a Borrow/Lend money transaction (Riba).

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  • Thanks, this sounds logical since it's not money, it's physical stuff.
    – Azad
    Commented Jan 2, 2014 at 11:42
  • Yes he can change the price prior to the transaction as he wants, but you know the only reason he's doing it, is the monthly payment, it is a masked riba in my opinion !!
    – Anas
    Commented Jan 2, 2014 at 16:15
  • @Anas - it is not masked riba by any means. It is called a ba`i salam and is an approved method of trade in Islam.
    – Ansari
    Commented Jan 2, 2014 at 17:52
  • @Anas, it is a legitimate reason and there is nothing wrong with it. Riba doesn't even appear in the picture when it comes to selling and buying goods. Riba is only when lending/borrowing money
    – user2982
    Commented Jan 2, 2014 at 22:11

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