Can I Ask Someone for a Loan and Offer to Pay Them Back 10% Extra as an Incentive

CategoriesTrade, Business & All Things Money [480]

Fatwa ID: 04363

Answered by: Maulana Mohammed Kamran Abid

 

Question

 

Salam. Is it halal if I ask someone for a loan and offer to pay them back 10% extra as an incentive? This would be straightforward riba, right?

 

 

بِسْمِ اللهِ الرَّحْمنِ الرَّحِيْم

In the name of Allah, the Most Gracious, the Most Merciful

 

Answer:

 

Waalaykumus Salaam. Allah says in the Quran, “Allah has permitted trade and forbidden usury.”[1]

There is a principle in Islamic jurisprudence that any loan which has a benefit is not permissible. Therefore, it would not permissible to ask someone for a loan and offer to pay them 10% extra because the extra amount would be considered riba.[2]

 

 

Only Allah knows best

Written by Maulana Mohammed Kamran Abid

Checked and approved by Mufti Mohammed Tosir Miah

Darul Ifta Birmingham

 

 


[1](Surah al-Baqarah, verse 275)

[2](Radd al-Muhtaar, vol. 5, pg. 166, Darul Fikr Beirut)

 

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