Question:
Is purchasing goods on 0% EMI permissible or not? Once you said EMI has no interest; they only take service charges for their service. But the product I buy here is cheaper than in other shops. There is no extra price on the product, but they take 1000 or 1500 as document charge under EMI. You said it is service. But some scholars say bank transactions are all interest. What is the reality?
Answer:
Regarding that: Is the service charge truly a service charge, or is it interest? Interest is something that repeats. If they apply interest on one lakh, they will add interest this month, next month, another month—continuously increasing. Interest multiplies over time.
A service charge is taken once for doing a service—processing documents, maintaining records, and so on. They may say, “We need to process documents and maintain records, so give 1000 rupees.” Whether it is one lakh or one crore, they ask 1000 only. It does not increase monthly. They do not ask document to charge every month. It is only once. So, document charge is not interest and thus it is permissible.