Islamic Fiqh > Financial transactions > Murabaha and riba-free credit
Buying on credit without interest: murabaha (sale at a known marked-up price), its conditions and the clear line with interest loans.
Murabaha is a sale at a stated cost plus a known profit; the seller must state the true cost, for hiding or lying about the cost is a betrayal (Muslim 101). Structurally, it differs from credit: the bank buys the asset, owns it, then resells it at a known price, while credit lends money for a supplement. The frontier: profit on a good owned and delivered at a stated cost is trade, an increase on money lent or owed is riba. The Malikis rank the banking form built on a binding promise among the 'ina sales forbidden in the law.
Updated on 07 October 2026 at 6:42 PM
Murabaha (cost-plus sale) and tawliya (sale at cost price): their rules, conditions and disagreements.
Minah al-Jalil by al-Dardir · Maliki school
(Chapter) It is permitted as murabaha (resale at a known price with a margin).
Al-Hawi al-Kabir by al-Mawardi · Shafi'i school
Chapter: sale by murabaha. Question: al-Shafi'i, may Allah have mercy on him, said: "If he sells it by murabaha upon ten, plus one, and says: it cost me one hundred dirhams, then says: I erred, but it cost me ninety, it is due to the buyer for its capital and his share of the profit."
Structurally yes: the bank buys the asset, owns it then resells it to you at a known price; credit lends money for a supplement (riba).
Per contract: remaining capital balance or total price; no penalty enriching the lender per the academies (the fine goes to charity).
The risk exists: check the bank's real ownership, cost transparency and absence of guaranteed rate on money.
Ijara (lease-to-own), musharaka mutanaqisa (diminishing partnership) and salam: see the corresponding pages.