Is it permissible to act as guarantor for a person taking a loan from the bank?

Dear Brothers & Sisters,
As-Salaamu-Alaikum wa Rahmatullahi wa Barakatuh. (May Allah's Peace, Mercy and Blessings be upon all of you)
One of our brothers/sisters has asked this question:
What is the Islamic ruling on acting as guarantor for a person taking a loan from the bank?.
(There may be some grammatical and spelling errors in the above statement. The forum does not change anything from questions, comments and statements received from our readers for circulation in confidentiality.)
Check below answers in case you are looking for other related questions:

Praise be to Allaah.

If this loan is riba-based (as is the case with most banks), meaning that the bank will take interest from him, then it is not permissible for you to act as a guarantor for the borrower, because by doing so you are helping the borrower and the bank to engage in riba (usury, interest), which is forbidden by Allaah and His Messenger, and which the Muslims are unanimously agreed is haraam. 

The scholars of the Standing Committee were asked about the ruling on sponsoring a person who wants to borrow from a riba-based bank. They replied: 

If the situation is as described, and the bank will charge interest on the loan, it is not permissible for the manager, the accountant or the treasurer to cooperate with them in that, because Allaah says (interpretation of the meaning): 

“do not help one another in sin and transgression”

[al-Maa'idah 5:2]

And it was proven that the Prophet (peace and blessings of Allaah be upon him) cursed the one who consumes riba, the one who pays it, the one who writes it down and the two who witness it, and he said: “They are all the same.”  

Fataawa al-Lajnah al-Daa’imah, 13/410 

And Allaah knows best.

Whatever written of Truth and benefit is only due to Allah's Assistance and Guidance, and whatever of error is of me. Allah Alone Knows Best and He is the Only Source of Strength.

Related Answers:

Recommended answers for you: