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If interest is haram, how can a Muslim get a house or a car in modern times?

The prices these days are so inflated it is impossible for regular people like myself to afford the so-called basic necessities. Getting a house without a mortgage is impossible, unless you are really rich. Getting a new car without a loan is the same.

Renting is not an option as that sidesteps the issue at hand, which is whether the modern Muslim is not a good fit for the credit economy.

Maybe it is not haram but maybe it is makruh, it does not matter. What matters is that it is not ideal.

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  • Can't you rent a house?
    – Kilise
    Commented Dec 15, 2016 at 12:58

3 Answers 3

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There are special programs for this. Basically, you purchase the house or car and pay no interest, but in addition to your principle payments you also pay "rent" to the bank (or trust) which is proportional to the amount of equity the bank still owns. (Your rent decreases each month.)

Mathematically there isn't much difference from an interest bearing loan, but this type of structure is imam-approved.

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There is a solution devised for situations similar to yours. The bank buys the house and sells to you at a profit. This way you dont pay interest but pay monthly to the bank for your debt.

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  • "At a profit", so, the bank charges interest...?
    – lemon
    Commented Dec 15, 2016 at 23:19
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    @lemon The bank assumes the role of a merchant. Just like a merchant who buys stuff at a certain price and sell at a higher one and make a profit. No interest is involved. Commerce is halal, so this process is halal.
    – user20421
    Commented Dec 15, 2016 at 23:50
  • But there is no line to be drawn between selling at a higher pricer and selling at the same price but with interest.
    – lemon
    Commented Dec 16, 2016 at 9:15
  • @lemon What does "selling at the same price but with interest" mean?
    – G. Bach
    Commented Dec 16, 2016 at 9:42
  • @G.Bach What do you think interest is?
    – lemon
    Commented Dec 16, 2016 at 11:24
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The Qur'an is not clear as to what exactly riba is - whether it's any interest of any kind, or exploitative interest (like that of a loan shark). The Qur'an is also not clear whether riba is haram or merely makruh.

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    2:275 is explicit that riba is forbidden. Numerous ahadith list riba among the worst sins, not least some of the ahadith talking about the so called "destructive sins"; see a list of them here. There is also ijma on the matter as far as I can tell. Other than that, there also seems to be ijma that any kind of interest is riba. Some sahaba refrained from sitting in the shadow of the house of someone whom they lent money for fear that this would constitute riba.
    – G. Bach
    Commented Dec 15, 2016 at 16:08
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    @G.Bach There are scholars who contest what you say. The opening paragraphs of the Wiki article provide citations supporting what I claim.
    – lemon
    Commented Dec 15, 2016 at 23:18

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