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:

Sir,

Would appreciate if you reply me following.

A person borrow a loan of Rs.100,000/- from Bank and sign terms & condition which includes the return procedure and interest  of this amount. The borrower after getting the loan denying that I will not pay interest and says that Interest is HARAM in Islam and I will pay only principal amount and will not pay interest.

Please reply that borrower is doing correct or not.

Awaiting your reply in this regards.

Thanks,

(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:

Repay loan 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 none worthy of worship but Allah Alone, and we bear witness that Muhammad (saws) is His slave-servant and the seal of His Messengers.

If one takes a loan, knowing that interest would be due on that loan, and knowing that signs a contract or an agreement that he will be liable to pay the interest on the loan….then both, the one who gives the loan on interest and the one who takes the loan on interest will be involved in dealing in the crime and sin of ‘riba’!

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)!

Allah Says in the Holy Quran Chapter 3 Surah Ale-Imraan verses 130-132:

130 O ye who believe! Devour not ‘riba’ doubled and multiplied; but fear Allah; that ye may (really) prosper.

131 Fear the Fire which is prepared for those who reject faith.

132 And obey Allah and the Messenger; that ye may obtain mercy.

Allah Says in the Holy Quran Chapter 2 Surah Baqarah verse 276:

276 Allah will deprive ‘riba’ of all blessings, but He will give increase for deeds of charity: for He loveth not creatures ungrateful and wicked.

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.

The right conduct of one who has taken a loan on interest in ignorance of the Laws of Allah is that he should first and foremost turn to Allah Subhanah in ‘taubah’ and seek sincere forgiveness from his Lord for indulging in what has been clearly declared as unlawful; and make a sincere covenant with his Lord that never ever will he indulge in the unlawful again….if the person is sincerely repentant at his transgression of the boundaries of Allah, it is expected that he will find his Lord Forgiving and Merciful.

Since the person had taken the loan on an agreement and contract that he will pay its due interest, it would only be right for the person to now fulfill his obligation and pay off his loan along with its due interest….and make a sincere intention and solemn covenant with his Lord that never ever he will indulge in the sin of ‘riba’ again.

Unless the one who loans the amount himself forgives the due interest, the borrower who took the loan on the condition and agreement that he will be liable for the interest on the loan does not have the right in Shariah to now turn back from fulfilling his part of the obligation merely by stating the giving of interest is unlawful in Islam….he should have considered the enormity of the sin and the prohibition of indulging in a transaction of ‘riba’ before he agreed to take the loan on interest!

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