I have purchased a house financed by a commercial bank in India. I have to pay an E.M.I. comprises with Principle & Interest. I am compelled to go for this arrangement for purchase of a house as my financial condition does not permit me on its own.
Therefore my questions are –
1. Whether Shariyah permits this arrangement?
2. Can I pay the Interest component in my EMI through some investment in a business of leasing, hiring & renting of automobiles where I get a fixed, assured monthly income?
In the name of Allah, the most Beneficent, the most Merciful.
Interest is haraam and unlawful. Equal monthly installments includes the payment of the principle sum together with interest for a certain number of months. As this arrangement consists of interest payment, it would therefore be impermissible.
One is not allowed to give halal lawfully earned money to pay off interest. The money gained from investing into a business of leasing, hiring and renting is lawful, thus one cannot use this money to pay the interest of an EMI agreement. (Jadeed Fiqhi Masaail p.406 v.1)
Only Allah Knows Best
Mohammed Tosir Miah
Darul Ifta Birmingham