Is interest (riba) on a loan haram?
The question as asked, details removedIs it allowed to lend money on the condition that the borrower pays back more?More
This is a sample answer written to show how the site works. It follows the standard Hanafi books, but no mufti has reviewed or signed it yet, so it is not a fatwa. For a real answer, ask a question. Ask a mufti
بِسْمِ اللهِ الرَّحْمٰنِ الرَّحِيْمِ اَلْجَوَابُ بِعَوْنِ الْمَلِكِ الْوَهَّابِ اَللّٰهُمَّ هِدَايَةَ الْحَقِّ وَالصَّوَابِ
1Short answer
No. Any extra amount or benefit made a condition of a loan is riba, which is haram. The one who takes it, the one who pays it, the one who writes it and the witnesses are all sinful. Paying back more of one's own free will, without any condition, is allowed.
2Detailed answer
A loan must be repaid in the same amount. So:
- Any condition of extra, a fixed percentage, a monthly sum, a gift, or any benefit such as free use of the borrower's house or car, makes the loan riba.
- Riba is haram for the lender to take and for the borrower to pay, and it is a sin to write the agreement or witness it.
- If, at the time of repaying, the borrower freely gives something extra with no condition or understanding beforehand, that is allowed and is good character.
- Someone who has already taken riba should repent and return it to whoever it was taken from, or if that is not possible, give it away to the poor without hoping for reward.
If someone believes they are forced into an interest-based loan by a real necessity, they should explain their exact situation to the darul ifta before acting.
3Evidence and sources
- Qur'an, Al-Baqarah 2:275-279
- Sahih Muslim, Book of Musaqah
- Sahih al-Bukhari, Book of Loans
- Bahar-e-Shariat, chapter on riba
Arabic texts, translations and how the ruling was derived
وأحل الله البيع وحرم الربا
Meaning: Allah has made trade lawful and forbidden riba.
لعن رسول الله صلى الله عليه وسلم آكل الربا وموكله وكاتبه وشاهديه، وقال: هم سواء
Meaning: The Messenger of Allah ﷺ cursed the one who consumes riba, the one who pays it, the one who writes it and its two witnesses, and said: they are all the same.
The Prophet ﷺ also said, "The best of you are those who are best in repaying", and he repaid a loan with something better than he had borrowed, which is the basis for a voluntary extra being allowed.
وَاللهُ أَعْلَمُ عَزَّوَجَلَّ وَرَسُوْلُهُ أَعْلَمُ صَلَّى اللهُ تَعَالٰى عَلَيْهِ وَآلِهِ وَسَلَّمَ