Mu' meneen Brothers and Sisters,

As Salaam Aleikum 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:

Asalamualaikum Burhan

May Allah subhanauvathala be please with your good work , may Allah`s peace and blessings be with you With reference to quran, hadith and ur sugestion , i would like to know if i can take a home loan . i dont own a house . im the only son in the family, i have my sisters and parents to take care.. Our whole family owns a 110 year old house in our town in Ooty

.. i work in banglore ,Every year i`l have to pay atleast 150,000 Rupees income tax ..which will be thirty percent of my salary .. if i take a home loan the interest on the loan will be taken from the income tax i pay. i will get a full interest exemption upto 100,000 rs per annum .. any ways i have to pay income tax .. so i can save paying tax by buying a house ..where my parents and my sisters family can stay..

Brother please quote any hadiths were our beloved prophet(S.A.W) took loan on interest for any reason...i know interest is haram ..

i donot have a car , i own a very old willys jeep (1974 model),, icannot take my sister and parents out. my jeep is open it has a soft half covered top .. i wish i can make their travel comfortable .. as for me im happy with my jeep ...please advise

1) if i can take a home / agricultural Property loan

2) if i can take life insurance policy

3) if i can take medical insurance

4) If i can take a car loan

Awaiting to hear from you as soon as possible

your brother in islam

(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.)

Answer:

Loans on Interest

In the name of Allah, We praise Him, seek His help and ask for His forgiveness. Whoever Allah guides none can misguide, and whoever He allows to fall astray, none can guide them aright. We bear witness that there is no one (no idol, no person, no grave, no prophet, no imam, no dai, nobody!) worthy of worship but Allah Alone, and we bear witness that Muhammad (saws) is His slave-servant and the seal of His Messengers.

Allah says in the Holy Quran Chapter 2 Surah Baqarah verse 274-276:

But those who devour ‘riba’ become like the one whom Shaitaan has bewitched and maddened by his touch. They have been condemned to this condition because they say, “Trade is just like ‘riba”, whereas Allah has made trade halaal and ‘riba’ haraam. Henceforth, if one abstains from taking ‘riba’ after receiving this admonition from his Lord, no legal action shall be taken against him regarding the ‘riba’ he had devoured before: his case shall ultimately go to Allah. But if one repeats the same crime even after this, he shall go to Hell, where he shall abide for ever! Allah deprives ‘riba’ of all blessing and develops charity, and Allah does not like an ungrateful, sinful person.

Allah says further in the Holy Quran Chapter 2 Surah Baqarah verse 278:

O Believers!, fear Allah and give up that ‘riba’ which is still due to you, if you are true believers. But if you do not do so, then you are warned of the declaration of war against you by Allah and His Messenger!

Allah says in the Holy Quran Chapter 4 Surah Nisa verse 161:

That they took ‘riba’, although they were forbidden. And that they devoured men’s substance wrongfully. We have prepared for those among them who reject faith a grievous punishment (of Hell Fire)!

Al-Tirmidhi Hadith 2829 Narrated by Ali ibn AbuTalib

Ali said he heard Allah's Messenger (saws) invoke the curse of Allah on those who took usury, those who paid it, those who recorded it, and those who refused to give sadaqah.

In light of the above declarations from the Quran and the Sunnah, it is evident that the concept of taking, paying, and transacting in interest is absolutely forbidden in Islam.

Your Question: if i can take a home / agricultural Property loan

Dear and Beloved Brother, there is absolutely no harm or restriction in Islam in taking a loan for home/agricultural/car or any other purpose, for the taking of loans per say is not forbidden in Islam. What is specifically and categorically forbidden in Islam is the taking, giving, or transacting in interest.

If the loan is interest bearing, then obviously it would be absolutely unlawful in the Sight of Allah, but if you can find someone who would give you an interest-free loan, there is absolutely no harm in taking such a loan.

Your Question: if i can take life insurance policy

Beloved Brother, the taking of insurance by itself is not forbidden in Islam, and there are many Islamic Insurance companies in the world today which provide insurance according to Shariah principles.

It is not the concept of insurance per se which is illegal in Islam, but rather what is ‘haraam’ and forbidden in Islam is the ‘interest-based’ aspect which is utilized by the conventional insurance companies during their transactions when conducting the insurance business.

Almost all the conventional insurance companies transact their business based on interest, and it is this interest aspect which is deemed absolutely haraam in Islam.

Most scholars and jurists in Islam have permitted the taking of medical insurance provided it is not interest-based; but they are all unanimous in their opinion against the taking of ‘life insurance’ policies.

Your Question: Brother please quote any hadiths were our beloved prophet(S.A.W) took loan on interest for any reason...

Dear and Beloved Brother, when the concept of interest is declared as haraam and unlawful by Allah Subhanah, it is absolutely inconceivable that any Prophet, leave alone one of the stature of the Last and Final Messenger (saws) would ever do anything in transgression of the commands of their Lord!

There are several hadiths which state that the Messenger of Allah (saws) did take loans in absolute necessity; but there is absolutely no evidence in his authentic and established traditions that he (saws) ever took a loan on interest.

Al-Tirmidhi Hadith 2827 Narrated by Abdullah ibn Mas'ud

Allah's Messenger (saws) said, "Even though usury be much, it leads in the end to penury."

Dear and Beloved Brother in Islam, although the things available on interest may seem very alluring and an immediate solution to some of man’s seeming problems, Allah is our witness, the truth is that in the end it always leads to penury, destitution, indigence and at times indulgence! Allah is our witness, interest is indeed a curse of the so-called modern-educated-material-but ungodly society we live in today…..and the believers must strive to fear and trust their Lord and abstain from involving themselves in this evil and oppressive concept of ‘interest’.

Sunan of Abu-Dawood Hadith 3325 Narrated by Abu Hurayrah

The Prophet (saws) prophesied: “A time is certainly coming to mankind, when only the receiver of usury will remain, and if one does not receive it, some of its vapour will reach him.”

Unfortunately, we live in those times today. The Prophet (saws) said that a time will come, when even if one tries his utmost to stay away from ‘riba’, the whole society and surroundings will be so much engrossed in ‘riba’, that some of its vapour or dust will reach this pious person.

If one trusts, obeys, and follows the guidance and commands of Allah and His Messenger (saws), one can be assured of never ever being misled; but if one believes, obeys and follows any other guidance, other than that of Allah and His Messenger (saws), one can be assured of being led astray.

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

Your brother and well wisher in Islam,

Burhan