Bai' Muajjal

A credit sale: the buyer takes the goods now and pays the agreed price at a fixed later date or in installments. The term describes the payment timing, so a Murabaha with deferred payment is also a Bai' Muajjal.

Conditions are that the price and due dates are fixed at signing, the seller owns and delivers the goods, and no increase is charged for late payment. It is the mirror image of Salam, where payment is immediate and delivery is deferred.

Bai' Muajjal is the fiqh name for what American consumers call buying on credit from the seller, and it is why trade credit between businesses raises no Shariah problem as long as the price is fixed. A supplier that invoices net-60 at a stated price has made a Bai' Muajjal.

The line is crossed when a late-payment charge is added as a percentage of the outstanding balance, because then the extra is compensation for time on a debt, which is riba. Compliant practice replaces that with either a fixed charity-directed charge (AAOIFI permits this as a deterrent, with the money going to charity, not the seller) or a right to recover actual collection costs.

For U.S. halal business financing, Bai' Muajjal underlies Murabaha inventory and equipment programs: the financier buys the goods from the supplier, resells them to the business at a fixed deferred price, and the business repays on schedule. For personal finance, buy-now-pay-later plans that charge no interest and no percentage late fee fit the structure, while those with deferred-interest clauses do not.