What is the ruling on stipulating an option (khiyar) as a stratagem to profit from a loan?
Chapter on the Option of the Two Parties in Sale
Al-Mughni
Book of Sales
Primary text
If the option stipulation is used as a stratagem (hiylah) to benefit from a loan, such as structuring a sale where the seller receives the principal amount, the buyer enjoys the profits/usufruct of the sold item during the option period, and then returns the item upon returning the price, this is impermissible. The taker of the price money is not permitted to utilize it or dispose of it during the option period.
Supporting text
Imam Ahmad stated that a stipulated option on property, such as real estate, is permissible if it is not intended as a stratagem to profit from the loan given. If the intention is merely to accommodate the debtor by giving him an option without seeking profit on the loan, it is permissible, though the option ceases upon the death of the original party and is not inherited by their heirs.