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The Concept of Borrowing Money In Islam (احكام قرض)

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،الحمد الله حمد الشاآرين، والصلاة والسّلام على المبعوث رحمة للعالمين،

وهادياً للناس أجمعين. صلاةً وسلاماً دائمين إلى يوم الدين،

 وآله وصحبه ومن تبعهم بإحسان، وسلم تسليماً آثيراً،

 أما بعد:

نفسالمؤمنمعلقةبدينهحتىيقضىعنه، رواه مسند احمد جلد3 ص442 المعنىأنروحالمؤمنمحبوسةعندخولالجنةمدةدوامالدينعليهحتىيقضىعنه(الفتح الربانى جلد15 ص91

(The Concept of Borrowing Money In Islam (احكامقرض)

Allah has stated in the Holy Qur’an: ‘O You Who Believe! When you contract a debt for a fixed period, write it down…’ (s2, v282)

It is the order of the Holy Qur’an, when the matters of borrowing money arise, whether it be for small or large amounts, it should be written down in a contract. Also, if possible this transaction should take place in front of two witnesses, so that there is no dispute at a later stage. Some Scholars state it is preferable and some state it compulsory to write down a loan transaction. If for any reason, in the future there is a dispute, this written document can be produced as proof.

In the Shari’ah, it is not a sin to take a loan (non-interest) in the state of necessity. However, to not return the borrowed money is oppression and a sin. The Prophet stated ﷺ: ‘A Muslim is the brother of another Muslim. He should not oppress his brother or hand him over to the enemy. The individual who fulfils the need of his Muslim brother, Allah will fulfil his need. That individual who removes a difficulty from his Muslim brother, Allah will remove his difficulty on the Day of Judgement.’ (Sunan Abu Dawood vol 2, p314)

 The taking of a loan is not something that a respectable individual would do without necessity, to create a burden upon themselves. When it is a necessity, then people should seek to assist their relatives and Muslim brothers, according to one’s capability.

The Virtue of Lending Money: Sayyidina Anas bin Malik RA related that the Prophet ﷺ stated: ‘During the journey of Me’raj, I saw written on the door of Jannah: ‘The one who gives charity is rewarded tenfold. The one who gives a loan is rewarded 18 fold.’ I asked Jibreel : ‘Why does the one who gives a loan get rewarded more?’ Jibreel replied ‘The one who gets charity (they usually posses a small amount already) and the one who seeks a loan only does so when he is in dire necessity.’ (Sunan Ibn Majah, P175)

Hakim Ul Ummah Shaykh Ashraf Ali Thanwi RH stated: ‘In the Ahadith, the virtue of giving a loan is for those who are truly needy. If an individual seeks a loan for wasteful spending and utilising it in sinful acts, then a loan should not be given to them.’ (Kamalate Ashrafiya, p102)

The One Who Seeks a Loan Should Keep His Intention Pure: At the time of taking a loan, the borrower should be truly concerned to repay the loan within the stipulated contracted time. If the borrower cannot repay the loan in a lump sum, he should make it clear beforehand, how he wishes to repay the loan. In this way there will be no difficulty placed upon the lender. The individual who takes his loan with these points in mind, his loan will be repaid within the stipulated time and he will be freed of this burden In sha Allah.

Those who take a loan with a bad intention, Allah will cause him humiliation in this world and the hereafter. Sayyidina Abu Hurairah related that the Prophet ﷺ stated: ‘The person who takes wealth from people with the intention of repaying it, Allah will assist him in the repayment of that loan. The person who takes wealth from people with the intention of squandering it, Allah will cause him destruction.’ (Sahih Bukhari, Musnad Ahmed, vol 3, p285)

Allamah Abdul Aziz Khawli االله رحمه writes: ‘Beware! do not take a loan without necessity. If you ever have to take a loan, then keep the firm intention and make effort to repay it. Do not dare to take a loan from people with 2 the intention of squandering their wealth and usurping it. This will only lead to your destruction and humiliation in this world and the next.’ (Al Adab un Nabawi, p49) It is not correct for the debtor to perform Nafil Sadaqah or free slaves. However, it is more important for him to strive to settle his debt as quickly as possible. (Fathul Bari Sharah Bukhari, vol 10, p128)

There are such severe warnings in the Ahadith with regards to those who misuse the wealth of others. This is for those businessmen who run a business, take a bank loan to fill their pockets with insurmountable wealth and then declare bankruptcy, writing off all the money they have borrowed and stored away. The Concern of the Companions to Repay Loans: The Companions of the Prophet were aware of the warnings issued by the Prophet ﷺ for not being careful in the matter of repayment of loans. Therefore, they were very concerned of repaying loans as soon as possible. If for some reason, they were unable to pay back a loan in their lifetime, they would bequest to their relatives to repay any specific loan immediately after their passing. Sayyidina Abdullah ibn Umar related, The Prophet ﷺ stated: ‘All the wrongs of a martyr are forgiven, except his debts.’ (Sahih Muslim/ Mishkaat p254)

2. When Sayyidina Zubayr , took part in the battle of the camel, he called his son Abdullah bin Zubayr and told him: ‘My greatest concern is for the settlement of my debts. If I am to be made a martyr, sell our land and repay my debts. If you are in need, seek the help of Allah . Sayyidina Abdullah bin Zubayr carried out this order to the fullest of his capability, to the extent that he announced for 4 consecutive years at the time of Hajj: ‘Whosoever has anything owing from my father, come and seek its repayment.’ (Sahih Bukhari, vol 1, p442)

1. In the last moments of the life of Sayyidina Umar , after being stabbed in the Masjid of the Prophet ﷺ, he (Sayyidina Umar ) called his son, Abdullah ibn Umar and said to him: ‘The first thing you must be attentive to is the repayment of my loans. They are to be settled by my family. If they are unable to settle them, seek assistance from Adi bin Ka’b . If he cannot assist, seek help from the Quraysh.’ (Sahih Bukhari, vol 1, p524)

Imam Muhammad االله رحمه stated: ‘We accept the saying of Sayyidina Ibn Umar RA, there is no Harm in doing this, when there is no condition stipulated from the beginning. Therefore in an agreement whereby a surplus amount is agreed by the creditor or by the debtor (in the form of goodwill) from the beginning, the transaction would be deemed Haram (prohibited) and the extra payment termed ‘interest’. (Muwatta Imam Muhammad, p358)

3. When Sayyidina Abdullah bin Amr bin Haram , went out for the battle of Uhud, he called his son Jabir and told him: ‘I am going to be martyred in this battle, whatever debts I have remaining, settle them.’ Sayyidina Jabir carried out this request of his father, he (Jabir ) would state: ‘I am pleased if I do not return to my family with even a date, after having settled my father’s debt in full.’ (Sahih Bukhari, vol 2, p580)

The Creditor Should be Lenient to The Debtor: Allah has stated in the Qur’an: ‘And if the debtor is in a difficult situation, then grant him time until it is easy for him to repay, but it you remit it by way of charity, that is better for you if you did but know.’ (s2, v280)

It is clear from the above verse of the Qur’an that if the debtor is unable to repay a loan easily, to forgive him of repayment is a great form of Charity. Hakim Ul Ummah Shaykh Thanwi RH stated: ‘If your debtor is a poor person, do not worry him. Rather, give him time or forgive a part or the entire debt. Allah will as a result of this, protect you from the severity of the Day of Judgement.’ (Ta’leem Ud Deen, p37)

Sayyidina Hasan binAli forgave the entire loan of an individual that was due to him.(Sahih Bukhari, vol 1, p354)

The Prophet ﷺ encouraged Sayyidina Ka’b bin Malik RA to show leniency to a debtor. Due to this, Ka’b bin Malik reduced the debtors’ loan by half. (Sahih Muslim, vol 2, p17) If the debtor can not repay the settled amount on time then he should not try to distance himself from the creditor. Otherwise, the trust of repayment will diminish, which may be detrimental. Sayyidina Abu Qatada RA related, the Prophet ﷺ stated: ‘That person who desires that Allah relieves him of difficulty and worry on the Day of Judgement, let him grant respite or forgive a debtor.’ (Sahih Muslim, vol 2, p18) Sayyidina BuraidaRA related the Prophet ﷺ stated: ‘The individual who grants respite to a debtor in difficulty, he will have the reward of giving Sadaqah written for him for every day he grants respite.’ (Sunan Ibn Majah, p174/ Musnad Ahmed, vol 3, p281) 3 The debtor committing Major sin by withholding repayment when sufficient funds are available: Allah has stated in the Holy Qur’an: ‘The Curse of Allah is on the Zalimun (Polytheist and wrong-doers)’ (s7, v44) Those people who, after having the means to repay a loan in full, do not do so, they are sinful of a Major sin. The money obtained from this unclean saving will be accursed and as such will be a means of destruction in the debtor’s temporary life in this world as well as the Hereafter. The Prophet ﷺ stated: ‘The individual who has the means to repay a loan but does not do so, this is oppression.’ (Sahih Bukhari, vol 1, p323)

Sayyidina Anas related, the Prophet stated: ‘Jibrail informed me to not pray the funeral prayer of that person who has outstanding debts.’ The Prophet then stated: ‘The debtor remains imprisoned in his grave until his debts are settled.’(Musnad Abi Yu’la, vol 3, p399) The inheritors of the estate should in the first instance after paying for funeral expenses try to fulfil the debt owed by the relative who has passed away. Sayyidina Abu Hurairah related that the Prophet stated: ‘The believer’s soul is withheld until the repayment of his debt’. (Musnad Ahmed, vol 3, p442)

Shaykh Ahmed Abdul Rahman Al banaa االله رحمه has explained in regards to the above ‘This implicates that the soul does not reach Heaven until the appointed debt is repaid.’ (Al Fathul Rabbani, vol 15, p91)

The Prophet ﷺ stated: ‘The creditor has the right of being firm in a speech to get back their wealth.’ (Sahih Bukhari, vol 1, p321) It is not right for the debtor to fight with the one who has done them a favour. What is most appropriate is when the time is right, seek respite from the creditor, explaining his (the debtors) situation.

Repay The Loan in a Beautiful Manner: Sayyidina Abu Rafi RA related, the Prophet ﷺ took a camel from an individual by way of a loan. The Prophet ﷺ gave this individual back a camel better than that which he had taken from him. The Prophet ﷺ stated: ‘The best person is he who repays his loan in a beautiful manner.’ (Sunan Abu Dawood, vol 2, p119)

Care, therefore, needs to be taken as in our time, there are many liars who given the status of Ulema (rather Ulema soo) mislead masses by providing false conjecture and misinterpretation on this order. Even today, if the creditor and debtor in accordance with Qur’an & Sunnah fix their ways and are clean as well as honest in their dealing than surely they will be saved from the curse of interest. O Allah! Save us from Haram and make what is Halal sufficient for us and through your Mercy and Blessings do not make us needy of others. Amin! (Jami Tirmidhi, vol 2, p195) (واالله يوفقنا لما يحب وترضى)

Sayyidina Ibn Umar RA took a loan of a few Dirhams from an individual by way of a loan. When he repaid this loan, he returned a greater amount to him. He (the creditor) stated: ‘You are giving me back more than I gave you.’ Sayyidina Ibn Umar said RA: ‘I am aware of that, but I have given it to you out of happiness. You did not request it from me.’ (Muwatta Imam Muhammad, p355)

In Islam interest is considered absolutely Haram. There is no refutation of this order as a detailed account regarding this matter is set forth in the Holy Qur’an (from Surah Al-Baqarah s2, v275-v280).

  (محمد يوسف ڈنكا (عفا االله عنه)

Mufti Muhammad Yusuf bin Yaqoob Danka

 01/ / 1431 Hijrah- 16. 04. 2010.

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Current Affairs articles

Interest or Contest? (With Allah).

Simple-interest---Compound-interest

http://www.inter-islam.org/Prohibitions/intrst.htm

The Definition Of Interest

The literal meaning of interest or Al-RIBA as it is used in the Arabic language means to excess or increase. In the Islamic terminology interest means effortless profit or that profit which comes free from compensation or that extra earning obtained that is free of exchange. Hazrat Shah Waliullah Dehlvi a great scholar and leader has given a very concise and precise definition of interest. He says,

“Riba` is a loan with the condition that the borrower will return to the lender more than and better than the quantity borrowed.”

Interest In Pre-Islamic Times

Hafiz Ibn Hajr writes in his commentary of Sahih Bukhari (Fathul Bari):

“Imam Malik reports on the authority of Zaid Ibn Aslam that in the period of ignorance (pre-Islamic times) interest was changed according to the following scheme. One person had a right in the property of another person. It may have been a general right because of the amount lent or the price of something purchased or in any other form. A time was set when the claim would be settled. When the appointed time arrived the creditor would ask the debtor if he wanted to settle the claim or pay interest with an extension to the time. If the claim was settled then there was no increase in the payment. Otherwise the debtor would increase the amount payable and the creditor would extend the period further.

(Vol. IV P.26)

Islam’s View Of Trade

Interest is not a subject without trade and commerce. Islam recognises trade and commerce not only as a lawful profession but also as a moral duty. Islam has laid down a complete set of rules for trade. The reason for these rules is to specify what halal earning is. There are many traditions (Ahaadith) concerning halal provision that can also be found in the books containing the traditions of the prophet (peace be upon him). Actually, Islam has encouraged men to earn their own provision and to provide it to their families. The condition is that the earning has to be according to the conditions set by the Shari’ah. Any sort of transaction that does not correspond to the rules of trade will not be allowed. These rules can be found under the heading of trade in the books of jurisprudence. Interest is amongst those conditions which all dealings must be free from.

How Is Interest Illegal

The definition of interest has already been mentioned as well as that it is prohibited. If we explore the Qur’an we will come across at least four places where Allah has mentioned interest.

The first one is in Surah Al-baqarah verse no.275

“Those who devour usury will not stand except as stands one whom the Satan by his touch has driven to madness. That is because they say, “trade is like usury”, but Allah has permitted trade and has forbidden usury”,

In the next verse verse 276 in the same place he says,

“Allah will deprive usury of all blessing, and will give increase for deeds of charity, for he does not love any ungrateful sinner.”

Two verses later in verse 278 he says,

“Oh you who believe! Fear Allah and give up what remains of your demand for usury if you are indeed believers.”

In verse 279 he says,

“If you do not, take notice of war from Allah and his Messenger sallallahu alaihe wasallm but if you repent you shall have your capital sum. Deal not unjustly and you shall not be dealt with unjustly.”

In the second place in Surah Aal-Imran, verse no.130 Allah says,

“Oh you who believe! Devour not usury doubled and multiplied; but fear Allah that you may prosper.”

In the third place in Surah Al-Nisaa’ Allah states in verse 161,

“That they took usury though they were forbidden and they devoured peoples wealth wrongfully; we have prepared for those amongst them who reject faith a grievous chastisement.”

In the fourth place, Surah Al-Room, verse no.39 Allah mentions

“That which you give in usury for increase through the property of people will have no increase with Allah: but that which you give for charity seeking the countenance of Allah, it is these who will get a recompense multiplied.”

Ahaadith Concerning Interest

These ahaadith have been taken from Mishkat-ul-Masabih under the section of interest and the English translation has been taken from its English version written by Al Hajj Moulana Fazl Karim (218-227 vol. II)

Hazrat Jabir radiyallahu anhu has reported that the Messenger of Allah sallallahu alaihe wasallm cursed the devourer of usury, its payer, its scribe and its two witnesses. He also said that they were equal (in sin).

(Muslim)

Hazrat Abu Hurairah radiyallahu anhu reported that the Holy Prophet sallallahu alaihe wasallm said: A time will certainly come over the people when none will remain who will not devour usury. If he does not devour it, its vapour will overtake him.

(Ahmed, Abu Dawood, Nisai, Ibn Majah.)

Hazrat Abu Hurairah radiyallahu anhu reported that the Messenger of Allah sallallahu alaihe wasallm said : Usury has got seventy divisions. The easiest division of them is a man marrying his mother.

(Ibn Majah)

Hazrat Abu Hurairah radiyallahu anhu reported that the Messenger of Allah sallallahu alaihe wasallm said: I came across some people in the night in which I was taken to the heavens. Their stomachs were like houses wherein there were serpents, which could be seen from the front of their stomachs. I asked: O Gabriel! Who are these people? He replied these are those who devoured usury.

(Ahmed, Ibn Majah)

Hazrat Ali radiyallahu anhu reported that he heard the Messenger of Allah sallallahu alaihe wasallm cursing the devourer of usury, its giver, its scribe and one who refuses to give Zakat and he used to forbid mourning.

(Nisai)

Hazrat Umar bin Al-Khattab radiyallahu anhu reported: the last of what was revealed was the verse of usury. The Messenger of Allah sallallahu alaihe wasallm was taken and he had not explained it to us. So, give up usury and doubt.

(Ibn Majah, Darimi)

Hazrat Abdullah bin Hanzalah radiyallahu anhu (who was washed by the angels) reported that the Messenger of Allah sallallahu alaihe wasallm said: A dirham of usury that a man devours and he knows is greater than 36 fornications.

(Ahmed, Darqutni)

Baihaqi reported from Ibn Abbas radiyallahu anhu in shuabul iman. He added and said: (as for) one whose flesh has grown out of unlawful food, the fire is more suitable for him.

After narrating all these verses from the Qur’an and relating all the Ahaadith it is apparent to us that interest could never be legal and halal. How could anybody even take the time out to think about a matter in which Allah has declared war on the user and his Beloved Prophet sallallahu alaihe wasallm has cursed him? As sensible people we can understand that what our creator has chosen for us is for our own prosperity only.

Interest From A Jurisprudical View

We should deeply thank the Sahaabah radiyallahu anhum in their efforts to spread the religion as they learnt it from the Prophet sallallahu alaihe wasallm. Then when the religion started to spread vastly Allah brought about four imams who described the religion in general terms in order to make the common public understand. They spent their lives trying to put the whole religion in a collective form through the Qur’an and the Ahaadith and the concise decisions of the Sahaabah radiyallahu anum. In the case of interest, all four imams established a general rule mainly concentrating on this statement made by the Prophet sallallahu alaihe wasallm.

Hazrat Al-Khudri radiyallahu anhu reported that the Prophet sallallahu alaihe wasallm said: Gold in exchange for gold, silver in exchange for silver, wheat in exchange for wheat, barley in exchange for barley, dates in exchange for dates, salt in exchange for salt is in the same category and (should be exchanged) hand to hand, so who ever adds or demands increase he has practised usury. The giver and taker are the same.

Out of the four imams, Imam Abu Hanifah rh has ruled that if the measurement system (volumetric or in compounds) is the same and the two items are in the same category, then they should be sold in the same amount and direct not in credit otherwise interest will be found.

Imam Shaf’ee rh says that if the items are valuable and could be considered food then there is the chance of interest. Imam Malik rh says that if the items are valuable and are edible then interest is a subject.

Advice

As you may have realised, giving and taking interest is unlawful. Unfortunately, the basis of many of the transactions (especially in banking and insurance), personal or business involve interest. Thus it is becoming increasingly difficult for the majority of the Muslims, especially those who are comercially orientated to abstain from dealings involving interest. Many of us purchase items on ‘Buy now, Pay later’ schemes thinking that this sort of scheme is of great benefit to us. Sadly, what we fail to recognize at the time of purchasing this ‘supposed bargain’ is the fact that if we fail to pay the required amount at the due time, we will be liable to pay interest.

Now, suppose a couple of months ago, we were purchased an item on a ‘Pay later’ scheme in which there was no question about us keeping upto date with payments, however due to a change in our financial situation, we have failed to pay the required amount, and are paying interest now as a result. We would have joined a group of those unfortunate people who have been cursed by the Prophet Sallallahu Alayhi Wassallam.

Our advice to anyone who is involved in any form of interest is that the individual should minimise his expenditure in these dealings and if possible abstain completely from these transactions. In any case, every individual should continue to seek Allah’s forgiveness. The philosophy shows that a person who takes interest does not gain anything in reality but through the explanation of the Qur’an verse,

” Allah decreases interest and increases sadaqah“

That in reality the money just goes to waste and the person does not even realise, and a person who gives money in the path of Allah, in whatever form it may be, actually gains although in reality it seems as though he is loosing out.

Every person should take all necessary precautions in their financial and social dealings. If a person neglects in keeping a watchful eye on financial dealings, this negligence will slowly spread to other aspects of religion. This will have a very detrimental effect on religious matters.

The dealings of usury and interest are not only a disadvantage to us in this world but will also be a source of great discomfort and pain for us in the hereafter. The Prophet Sallallahu Alayhi Wassallam has informed us about the punishment that awaits those people who deal with interest:

“Hazrat Abu Huraira Radhiallaho Anhu has reported the saying of the Prophet Sallallahu Alayhi Wassallam that during his ascension (Mi’raaj), he noticed a group of men whose stomachs were bloated to the size of big rooms and their wanting to move from their positions was impossible. They would be crushed in a stampede by the friends of Fir’awn. The Prophet Sallallahu Alayhi Wassallam seeing their condition asked Hazrat Jibra’eel Alayhis Salaam about their identity. He was informed that they were the people who indulged in dealings of usury and interest.”

The summary of the matter is that interest is hazardous and should be abstained from in all manners. If anybody has a case they wish to solve then they should contact a Mufti and present their problem as it is.

I conclude by asking you my dear reader, is it really worth destroying the eternal life of the hereafter, just so that we may have a few more comforts in a life which can come to an end any moment.

https://www.youtube.com/watch?v=DT56CVn2NXI