Ref. No. 37 / 1039

Nowadays Bajaj finance has started EMI schemes on all electronic shops and furniture shops. They are giving loans to buy things on EMI at 0 % int. They only charge nominal service charge or processing fee for documents which is very nominal. Rest you only have to pay the principal loan amount in EMI.
I will give my example...

I have bought a washing machine from them. The total price for the machine is 21400. I paid 13000 as down payment. SO my balance to pay now for the machine is 8400.  SO i have taken a loan from bajaj finance  for only 8400 amt. They have made 8 instalments for me. Each instalment i have to pay 1075 per month till 8 months. 1075 X 8 mths comes to 8600. That means i just have to pay rs 200 extra as service charge to them for the entire loan as my actual repayment amount was only 8400 and I am paying 8600 so 200 extra for their charges. Apart from that no other rate of interest nothing. They themselve have mentioned in my loan slip that the customer pays 0 % interest. Apart from that we dont know how they do business with the shopkeeper and how do they pay to the shopkeeper. That is their concern and business  policy which they are responsible. But as i clarified earlier above that neither they are ar charging me interest nor i am paying any interest excpet just rs 200 extra as doc charges which is very nominal and not painful to pay on the purchase of 21400 thing. Basically interest is something which is exorbitant amount taken above the principle amt which painful to repay as per my knowledge. Please guide...
asked Mar 28, 2016 in Usury / Insurance by sufyan

1 Answer

Ref. No. 37 / 1038

In the name of Allah the most Gracious the most Merciful

The answer to your question is hereunder:

It includes interest and usury that’s why it is not allowed, hence you have to abstain from it.

And Allah knows best

Darul Ifta

Darul Uloom Waqf Deoband

answered Apr 3, 2016 by Darul Ifta